Abstract: This study was aimed to examine the response and contribution of early drought to traits related to N2-fixation and pod yield and their correlation to drought tolerance. The experiment was conducted at the Field Crop Research Station of Khon Kaen University, Khon Kaen Province, Thailand in the dry season of 2007/08. Eleven peanut genotypes (ICGV 98300, ICGV 98303, ICGV 98305, ICGV 98308, ICGV 98324, KK 60-3, Tainan 9, KKU 72-1, KKU 60, KK 4 and KKU 1) and two soil moisture levels [field capacity (FC) and 1/3 available water (1/3 AW)] were laid out in a split-plot design with four replications. Early drought treatment was given by maintaining 1/3 AW from emergence to 40 days after emergence followed by adequate water supply. The data were recorded for nodule dry weight (NDW) and biomass production (BM) as traits related to N2-fixation (TNf) at harvest. In addition to, the data on pod yield, number of pod plant-1, number of seed pod-1 and seed size (SZ) were also collected at harvest. Specific leaf area (SLA) and SPAD chlorophyll meter reading (SCMR) were measured on 20, 40, 50 and 60 days after emergence (DAE) as drought tolerance traits and harvest index (HI) was calculated after harvest. Early drought did not affect NDW and BM. Major variation was found among peanut genotypes and ICGV 98305 showed higher NDW and pod yield under drought condition. Significant and consistent correlation was found between NDW and BM, (r = 0.82*, p < 0.05) and (r = 80*, p < 0.05) under FC and 1/3 AW, respectively. The correlation between TNf and pod yield and yield component parameters varied under the two water regimes. Under 1/3 AW, the only positive correlation observed was between SZ and BM and it might be the only reason for increase in pod yield in some genotypes. SCMR at 60 DAE was strongly related with TNf under both water regimes. There was not any correlation between SLA and HI with NDW and BM. SCMR at 60 DAE is useful to detect chlorophyll density and N2-fixation under both water regimes because of its high and constant correlation with TNf.