No single mechanism can provide an adequate explanation for the inhibition of photosynthesis when plants are supplied with ammonium (NH4+) as the sole nitrogen (N) source. We performed a hydroponic experiment using two N sources [5 mM NH4+ and 5 mM nitrate (NO3−)] to investigate the effects of NH4+ stress on the photosynthetic capacities of two wheat cultivars (NH4+‐sensitive AK58 and NH4+‐tolerant XM25). NH4+ significantly inhibited the growth and light‐saturated photosynthesis (Asat) of both cultivars, but the extent of such inhibition was greater in the NH4+‐sensitive AK58. The CO2 concentration did not limit CO2 assimilation under NH4+ nutrition; though both stomatal and mesophyll conductance were significantly suppressed. Carboxylation efficiency (CE), light‐saturated potential rate of electron transport (Jmax), the quantum efficiency of PSII (ΦPSII), electron transport rate through PSII [Je(PSII)], and Fv/Fm were significantly reduced by NH4+. As a result, NH4+ nutrition resulted in a significant increase in the production of hydrogen peroxide (H2O2) and superoxide anion radicals (O2•−), but these symptoms were less severe in the NH4+‐tolerant XM25, which had a higher capacity of removing elevated reactive oxygen species (ROS). Thus, NH4+ N sources might decreased electron transport efficiency and increased the production of ROS, exacerbating damage to the electron transport chain, leading to a reduced plant photosynthetic capacity.