In extreme habitats, plants exhibit versatile photosynthetic pathways in response to environmental variables. One such variation of carbon acquisition, Crassulacean Acid Metabolism (CAM), is often employed by plants in arid regions. These plants usually face a “desiccation-starvation dilemma” because they have to acquire enough carbon to survive while minimizing the amount of water loss through stomatal adjustments and other physiological and biochemical functions. CAM photosynthesis has higher water-use efficiency because stomata open at night when the transpiration rate is low; CAM is therefore adaptive in arid regions. Some CAM plants are described as “facultative” CAM plants because they are highly flexible in their mode of photosynthesis and can switch to C3 photosynthesis (i.e. stomata open during the day) under suitable conditions. This review will focus on the ecological and physiological significance of this trait by discussing the environmental exposures necessary to trigger facultative CAM and their correlation with each other and the plant. Factors such as CO2 level, water status, salinity, temperature, light and nutrient status will be of particular focus. Discussion on how plants use facultative CAM to avoid stress and how their physiology contributes in this process will also be addressed. Although CAM is fundamentally a biochemical pathway, this review will mainly focus on the interaction of ecological conditions and physiological characteristics of plants that employ facultative CAM.