Purpose: Dry-eye disease, an increasingly prevalent ocular-surface disorder, significantly alters tear physiology. Understanding the basic physics of tear dynamics in healthy and dry eyes benefits both diagnosis and treatment of dry eye. We present a physiological-based model to describe tear dynamics during blinking. Materials and methods: Tears are compartmentalized over the ocular surface; the blink cycle is divided into three repeating phases. Conservation laws quantify the tear volume and tear osmolarity of each compartment during each blink phase. Lacrimal-supply and tear-evaporation rates are varied to reveal the dependence of tear dynamics on dry-eye conditions, specifically tear osmolarity, tear volume, tear-turnover rate (TTR), and osmotic water flow. Results: Predicted periodic-steady tear-meniscus osmolarity is 309 and 321 mOsM in normal and dry eyes, respectively. Tear osmolarity, volume, and TTR all match available clinical measurements. Osmotic water flow through the cornea and conjunctiva contribute 10 and 50% to the total tear supply in healthy and dry-eye conditions, respectively. TTR in aqueous-deficient dry eye (ADDE) is only half that in evaporative dry eye (EDE). Conclusions: The compartmental periodic-steady tear-dynamics model accurately predicts tear behavior in normal and dry eyes. Inclusion of osmotic water flow is crucial to match measured tear osmolarity. Tear-dynamics predictions corroborate the use of TTR as a clinical discriminator between ADDE and EDE. The proposed model is readily extended to predict the dynamics of aqueous solutes such as drugs or fluorescent tags. © 2014 Informa Healthcare USA, Inc.