Abstract: Halostachys caspica was used as material, seed germination characteristics and seedling physiological change under drought stress were studied to confirm its adaptive capacity to drought stress. PEG was used to simulate drought stress, and the growth and physiological indexes during germination and seedling stage were detected. The results showed that high osmotic potential (-0.6 to -0.4 MPa) had stimulating effect on seed germination, promoted the initial germination rate and shortened the time to the final germination rate, and the final germination rate under high osmotic potential treatment was not significantly different from that of CK. The medium and low osmotic potential (- 2.0 to - 0.8 MPa) inhibited seed germination significantly, reduced the initial germination rate and prolonged the time to final germination rate. Seedlings of Halostachys caspica were stimulated and had positive physiological responses to medium and high osmotic potential (-0.7 to -0.3 MPa). Compared with CK, relative conductivity decreased while soluble sugar content, CAT activity, and POD activity showed an increasing trend. Based on the characteristics of seed germination and physiological changes of seedlings under PEG treatments, it is concluded that Halostachys caspica can germinate and grow well at -0.7 to -0.3 MPa osmotic potential.