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Volatile terpenes serve multiple biological roles including tree resistance against herbivores. The increased frequency and severity of drought stress observed in forests across the globe may hinder trees from producing defense-related volatiles in response to biotic stress. To assess how drought-induced physiological stress alters volatile emissions alone and in combination with a biotic challenge, we monitored pre-dawn water potential, gas-exchange, needle terpene concentrations and terpene volatile emissions of ponderosa pine (Pinus ponderosa) saplings during three periods of drought and in response to simulated herbivory via methyl jasmonate application. Although 3-, 6- and 7-week drought treatments reduced net photosynthetic rates by 20, 89 and 105%, respectively, the magnitude of volatile fluxes remained generally resistant to drought. Herbivore-induced emissions, however, exhibited threshold-like behavior; saplings were unable to induce emissions above constitutive levels when pre-dawn water potentials were below the approximate zero-assimilation point. By comparing compositional shifts in emissions to needle terpene concentrations, we found evidence that drought effects on constitutive and herbivore-induced volatile flux and composition are primarily via constraints on the de novo fraction, suggesting that reduced photosynthesis during drought limits the carbon substrate available for de novo volatile synthesis. However, results from a subsequent 13CO2 pulse-chase labeling experiment then confirmed that both constitutive (<3% labeled) and herbivore-induced (<8% labeled) de novo emissions from ponderosa pine are synthesized predominantly from older carbon sources with little contribution from new photosynthates. Taken together, we provide evidence that in ponderosa pine, drought does not constrain herbivore-induced de novo emissions through substrate limitation via reduced photosynthesis, but rather through more sophisticated molecular and/or biophysical mechanisms that manifest as saplings reach the zero-assimilation point. These results highlight the importance of considering drought severity when assessing impacts on the herbivore-induced response and suggest that drought-altered volatile metabolism constrains induced emissions once a physiological threshold is surpassed.