As pressure on water resources increases, pasture species that express traits for improved water-use efficiency (WUE) while maintaining desirable agronomic and production characteristics are needed. The objective of this study was to use a biophysical modelling analysis to test the sensitivity of key pasture plant functional traits on WUE. Biomass production and water use of monocultures of perennial ryegrass (Lolium perenne L.) with varying plant traits were determined under a range of soil, climate, and irrigation conditions. Five plant traits (temperature sensitivity, light extinction, root depth, root partitioning, and sensitivity to water stress) were investigated. Parameters related to root systems had the greatest impact across all environments on harvestable dry matter and WUE. In particular, root depth and root partitioning showed potential for improving both harvestable yield and WUE. These traits merit further attention under more realistic soil conditions, simultaneously taking into consideration other desirable traits such as nutrient capture and agronomic suitability for grazed systems.