Information on how vegetation adapts to differences in water supply is critical for predicting vegetation survival, growth and water use, which, in turn, has important impacts on site hydrology. Many field studies assess adaptation to water stress by comparing between disparate sites, which makes it difficult to distinguish between physiological or morphological changes and long-term genetic adaptation. When planting trees into new environments, the phenotypic adaptations of a species to water stress will be of primary interest. This study examined the response to water availability of Eucalyptus kochii ssp. borealis (C. Gardner) D. Nicolle, commonly integrated with agriculture in south-western Australia for environmental and economic benefits. By choosing a site where the groundwater depth varied but where climate and soil type were the same, we were able to isolate tree response to water supply. Tree growth, leaf area and stand water use were much larger for trees over shallow groundwater than for trees over a deep water table below a silcrete hardpan. However, water use on a leaf area basis was similar in trees over deep and shallow groundwater, as were the minimum leaf water potential observed over different seasons and the turgor loss point. We conclude that homeostasis in leaf water use and water relations was maintained through a combination of stomatal control and adjustment of sapwood-to-leaf area ratios (Huber value). Differences in the Huber value with groundwater depth were associated with different sapwood-specific conductivity and water use on a sapwood area basis. Knowledge of the coordination between water supply, leaf area, sapwood area and leaf transpiration rate for different species will be important when predicting stand water use.