This experiment aimed to estimate heterosis, combining ability effect and some genetic components of relative water content (RWC), excised leaf water loss (ELWL), chlorophyll content (CC), stay green (Stg) and flag leaf area (FLA) under well-watered and drought stress conditions in grain sorghum. The plant materials consisted of 43 sorghum entries including 30 F1 hybrids, five restorer lines, six B-lines and two check cultivars for comparison. The lines were crossed to testers in line × tester mating design in season 2013. The entries were evaluated in 2014 and 2015 seasons under well-watered and drought stress conditions at two locations represent clay and new reclaimed soils with three replications (eight environments). Surface and drip irrigation systems were applied in the clay and reclaimed soil, respectively in order to carry out the well-watered and drought stress conditions. The results of the combined analysis of combing ability revealed that, the lines, testers and line × testers were highly significant for most studied traits suggesting that the plant materials possessed considerable variability that both general (GCA) and specific (SCA) combining ability effects were involved in the genetic expression of these traits. However, the parental lines ICSA11, ICSA536 and ICSR102 were the best parents that showed GCA effects for one or two traits and involved in one or two cross combinations that showed highly desirable SCA effects or showed remarkable heterosis. The cross combination ICSA536 × ICSR628 had high positive and significant SCA effects for RWC and CC, while the cross combination ICSA11 × ICSR102 had high positive and significant SCA effects for stay green and flag leaf area. For heterosis, the cross combination ICSA598 × ICSR89034 exhibited desirable magnitude of mid-parent-heterosis for the physiological criteria. The degree of dominance of the RWC, CC and FLA were higher than unity, that means non-additive effect was found to be predominant and desirable in the inheritance of these traits and indicating that heterosis breeding would be more appropriate method for the improvement of this traits. While additive effect was the favorable direction in ELWL and Stg traits and can be easily select these traits in early generation. Chlorophyll content gave maximum narrow-sense heritability followed by stay green, indicating the role of additive gene action in the inheritance of these traits. Broad-sense heritability estimates appeared to be high for all physiological traits under study, indicating the role of non-additive gene action effects on the phenotypic expression of these traits.