Drought stress is a major problem for agriculture worldwide, causing significant yield losses. Plants have developed highly flexible mechanisms to deal with drought, including organ- and developmental stage-specific responses. In young leaves, growth is repressed as an active mechanism to save water and energy, increasing the chances of survival but decreasing yield. Despite its importance, the molecular basis for this growth inhibition is largely unknown. Here, we present a novel approach to explore early molecular mechanisms controlling Arabidopsis leaf growth inhibition following mild drought. We found that growth and transcriptome responses to drought are highly dynamic. Growth was only repressed by drought during the day, and our evidence suggests that this may be due to gating by the circadian clock. Similarly, time of day strongly affected the extent, specificity, and in certain cases even direction of drought-induced changes in gene expression. These findings underscore the importance of taking into account diurnal patterns to understand stress responses, as only a small core of drought-responsive genes are affected by drought at all times of the day. Finally, we leveraged our high-resolution data to demonstrate that phenotypic and transcriptome responses can be matched to identify putative novel regulators of growth under mild drought.