Metabolically engineered high-leaf oil plants have been developed to meet the increasing demand for plant oils. Oil production of these plants under controlled conditions is promising; however, their performance under field-like conditions with abiotic stresses remains uncertain. In this study, wild-type (WT) and high-leaf oil (HLO) transgenic tobacco (Nicotiana tabacum) plants were exposed to moderate and sustained water stress to mimic field conditions. The effects of water stress on biomass and lipid accumulation were investigated at the physiological, biochemical, and transcriptional levels. The presence of transgenes increased leaf triacylglycerol (TAG) levels in HLO plants by upregulating endogenous genes involved in lipid biosynthesis at the expense of biomass reduction, altered leaf lipid content and profile, and a decrease in unsaturation levels of membrane lipids compared to WT plants. Moreover, the biomass penalty in HLO plants could reduce canopy transpiration, contributing to their better performance under water-limited environments. Furthermore, WT and HLO plants exhibited enhanced TAG accumulation under water stress but via different mechanisms. In WT plants, water stress induced lipid remodeling, upregulated genes encoding phosphatidic acid phosphatase (PAP), diacylglycerol o-acyltransferase (DGAT2), and lipid droplet-associated proteins (LDAP1), but downregulated genes encoding Gly-Asp-Ser-Leu (GDSL) lipases. In contrast, HLO plants showed increased TAG accumulation primarily through upregulation of OLEOSINS and downregulation of GDSLs under water stress. In conclusion, moderate water stress promoted oil production in HLO plants, demonstrating the robustness of HLO technology for sustainable oil production in the field under water deficit conditions which may be more prevalent in the future due to climate change.