Evidence is increasing to suggest that a major activity of roots is to redistribute soil water. Roots in hydraulic contact with soil generally either absorb or lose water, depending on the direction of the gradient in water potential between root and soil. This leads to phenomena such as 'hydraulic lift' where dry upper soil layers drive water transfer from deep moist layers to the shallow rhizosphere and, after rain or surface irrigation, an opposite, downward water transfer. These transport processes appear important in environments where rainfall is strongly seasonal (e.g. Mediterranean-type climates). Irrigation can also induce horizontal transfers of water between lateral roots. Compared with transpiration, the magnitudes, pathways, and resistances of these redistribution processes are poorly understood. Field evidence from semi-arid eucalyptus woodlands is presented to show: (i) water is rapidly exchanged among lateral roots following rain events, at rates much faster than previously described for other types of hydraulic redistribution using sap flow methods; (ii) large axial flows moving vertically up or down the stem are associated with the horizontal transfer of water between roots on opposite sides of the stem. It appears that considerable portions of the stem axis become involved in the redistribution of water between lateral roots because of partial sectoring of the xylem around the circumference of these trees.