[Truncated abstract. Please see the pdf format for the complete text. Also, formulae and special characters can only be approximated here. Please see the pdf version for an accurate reproduction.] This thesis examines the water use, ecophysiology and hydraulic architecture of Eucalyptus marginata (jarrah) growing on bauxite mine rehabilitation sites in the jarrah forest of south-western Australia. The principal objective was to characterise the key environment and plant-based influences on tree water use, and to better understand the dynamics of water use over a range of spatial and temporal scales in this drought-prone ecosystem. A novel sap flow measurement system (based on the use of the heat pulse method) was developed so that a large number of trees could be monitored concurrently in the field. A validation experiment using potted jarrah saplings showed that rates of sap flow (transpiration) obtained using this system agreed with those obtained gravimetrically. Notably, diurnal patterns of transpiration were measured accurately and with precision using the newly developed heat ratio method. Field studies showed that water stress and water use by jarrah saplings on rehabilitation sites were strongly seasonal: being greatest in summer when it was warm and dry, and least in winter when it was cool and wet. At different times, water use was influenced by soil water availability, vapour pressure deficit (VPD) and plant hydraulic conductance. In some areas, there was evidence of a rapid decline in transpiration in response to dry soil conditions. At the end of summer, most saplings on rehabilitation sites were not water stressed, whereas water status in the forest was poor for small saplings but improved with increasing size. It has been recognised that mature jarrah trees avoid drought by having deep root systems, however, it appears that saplings on rehabilitation sites may have not yet developed functional deep roots, and as such, they may be heavily reliant on moisture stored in surface soil horizons. Simple predictive models of tree water use revealed that stand water use was 74 % of annual rainfall at a high density (leaf area index, LAI = 3.1), high rainfall (1200 mm yr-1) site, and 12 % of rainfall at a low density (LAI = 0.4), low rainfall (600 mm yr-1) site, and that water use increased with stand growth. A controlled field experiment confirmed that: (1) sapling transpiration was restricted as root-zone water availability declined, irrespective of VPD; (2) transpiration was correlated with VPD when water was abundant; and (3) transpiration was limited by soil-to-leaf hydraulic conductance when water was abundant and VPD was high (> 2 kPa). Specifically, transpiration was regulated by stomatal conductance. Large stomatal apertures could sustain high transpiration rates, but stomata were sensitive to hydraulic perturbations caused by soil water deficits and/or high evaporative demand. No other physiological mechanisms conferred immediate resistance to drought. Empirical observations were agreeably linked with a current theory suggesting that stomata regulate transpiration and plant water potential in order to prevent hydraulic dysfunction following a reduction in soil-to-leaf hydraulic conductance. Moreover, it was clear that plant hydraulic capacity determined the pattern and extent of stomatal regulation. Differences in hydraulic capacity across a gradient in water availability were a reflection of differences in root-to-leaf hydraulic conductance, and were possibly related to differences in xylem structure. Saplings on rehabilitation sites had greater hydraulic conductance (by 50 %) and greater leaf-specific rates of transpiration at the high rainfall site (1.5 kg m-2 day1) than at the low rainfall site (0.8 kg m-2 day1) under near optimal conditions. Also, rehabilitation-grown saplings had significantly greater leaf area, leaf area to sapwood area ratios and hydraulic conductance (by 30-50 %) compared to forest-grown saplings, a strong indication that soils in rehabilitation sites contained more water than soils in the forest. Results suggested that: (1) the hydraulic structure and function of saplings growing under the same climatic conditions was determined by soil water availability; (2) drought reduced stomatal conductance and transpiration by reducing whole-tree hydraulic conductance; and (3) saplings growing on open rehabilitation sites utilised more abundant water, light and nutrients than saplings growing in the forest understorey. These findings support a paradigm that trees evolve hydraulic equipment and physiological characteristics suited to the most efficient use of water from a particular spatial and temporal niche in the soil environment.