Salt-tolerant grasses of warm sub-tropical ecosystems differ in their distribution patterns with respect to salinity and moisture regimes. Experiments were conducted on CO2 fixation and light harvesting processes of four halophytic C4 grasses grown under different levels of salinity (0, 200 and 400 mM NaCl) under ambient environmental conditions. Two species were from a high saline coastal marsh (Aeluropus lagopoides and Sporobolus tremulus) and two were from a moderate saline sub-coastal draw-down tidal marsh (Paspalum paspalodes and Paspalidium geminatum). Analyses of the carbon isotope ratios of leaf biomass in plants indicated that carbon assimilation was occurring by C4 photosynthesis in all species during growth under varying levels of salinity. In the coastal species, with increasing salinity, there was a parallel decrease in rates of CO2 fixation (A), transpiration (E) and stomatal conductance (g s), with no effect on water use efficiency (WUE). These species were adapted for photoprotection by an increase in the Mehler reaction with an increase in activity of PSII/CO2 fixed accompanied by high levels of antioxidant enzymes, superoxide dismutase and ascorbate peroxidase. The sub-coastal species P. paspalodes and P. geminatum had high levels of carotenoid pigments and non-photochemical quenching by the xanthophyll cycle.