<p>Water loss is a major challenge for photosynthetic organisms. Most are prone to drought stress and only few can tolerate full desiccation. Here, we investigated regulation of photosynthetic electron flow during dehydration and rehydration in <i>Haematococcus lacustris</i>, a desiccation tolerant green alga. During dehydration, non-photochemical quenching (NPQ) increased for dissipating excess light energy, while light-use efficiency of photosystems II (PSII) and I (PSI) decreased. The reaction centre of PSI (P700) became electron-limited at its donor side, helping form photoprotective P700⁺. Inhibiting alternative oxidases with octyl gallate delayed chlorophyll fluorescence quenching, indicating that plastid terminal oxidases (PTOX) supported formation of NPQ during desiccation. Reduction rates of P700⁺ during a saturating pulse were slower if cells dehydrated slower, showing that photoprotection was upregulated during desiccation acclimation. During rehydration, octyl gallate and diphenyleneiodonium (DPI), a flavoenzyme inhibitor, slowed oxidation of P700 under actinic light, indicating PTOX and flavodiiron proteins (FLV) were involved in maintaining P700⁺. A similar response occurred with the protonophore nigericin. We conclude that beyond preventing over-reduction of the electron transport chain, PTOX and FLV facilitated thylakoid luminal acidification under low water stress, protecting photosystems via NPQ, photosynthetic control and P700⁺ formation.</p>