The overall objective of this study was to provide a better understanding of physiological basis of heterosis and combining ability in maize (' Zea mays' L.). The results showed that harvest index, leaf area index (LAI), and 'stay green' are influenced primarily by additive effects, while genetic effects influencing dry matter accumulation (DMA) changed during development from mostly additive in early development to non-additive as development progressed. Three important sets of physiological processes were identified as being associated with heterosis in maize: (i) heterosis for DMA before silking resulting from higher light interception by hybrids; (ii) heterosis for DMA during the grain-filling period, which resulted from higher light interception and a slightly longer grain-filling period and; (iii) heterosis for kernel set that was attributable, in part, to an increased rate of DMA during the silking period and greater kernel set per unit of DMA. Heterosis for grain yield in maize expressed also through its effects on leaf carbon exchange rate (CER) as a physiological process underlying dry matter accumulation. The results showed that the maintenance of leaf CER throughout a plant's life cycle, rather than potential leaf CER, is positively associated with dry matter accumulation during the grain-filling period and grain yield. The results also showed that plant density is not an appropriate method to identify relative levels of stress tolerance of hybrids and their parental inbred lines. To measure the stress tolerance of hybrids and their parents, a methodology must be developed that incorporates compensation for the inherently different size of inbred lines vs. hybrids of maize.