In this study the effect of drought stress on morphological traits, metabolites proline accumulation, soluble carbohydrates and the yield of Tarragon (Artemisia dracunculus L.), was evaluated in order to produce Tarragon in drought stress condition as a medicinal plant, and also determine the threshold of stress tolerance. This research was done using randomized complete blocks design with 4 treatments and 3 replications. The stress treatments were included T1 (100% of field capacity), T2 (80% of field capacity), T3 (60% of field capacity) and T4 (40% of field capacity). According to the results of statistical analysis, the drought stress had significant effect on morphological traits, flowering shoot yield, proline and soluble carbohydrates. In addition, the enhancement of drought stress led to decrease in plant height, canopy diameter, leaf length, leaf width and leaf surface, stem diameter, the length of longest lateral shoot, root length and its development, shoot yield and dry leaf yield. Comparison of treatment means showed that the highest plant height, canopy diameter, leaf length, leaf width and leaf surface, stem diameter, the length of longest lateral shoot, root length, shoot yield and dry leaf yield were related to T1 (non stress); in addition, the highest amount of proline, soluble carbohydrates and root development were related to T4 (40%FC). Therefore, drought stress had negative effect on most morphological traits and flowering shoot yield; however, it led to increase in the root length, proline and soluble carbohydrates of flowering shoots.