The influence of water stress on growth and yield of Centella asiatica, a traditional medicinal herb of Nepal, was carried out in a pot experiment. Variation in different growth traits of Centella asiatica was investigated using vegetative clones of one population. The plantlets were grown in earthen pots containing soil, sand and vermicompost and treated with different levels of water stress (30, 70, 100, and 125% of pot capacity by mass). The experimental design was completely randomized and each treatment was composed of forty plants. An array of vegetative traits including: number of leaves, petiole length, specific leaf area, number of primary branches, and plant biomass was examined. Growth traits such as root length, leaf area and number of flowers per ramet demonstrated significant variation in response to water stress. The results suggested that plants irrigated to 100% pot water capacity showed highest growth and plant biomass production.