This thesis studied the influence of moisture content on the dynamic estimation of stiffness in wood of Pinus radiata D. Don. This is an important non-destructive measure for estimation of stiffness in standing trees, logs and lumber. Moisture content affects both acoustic velocity and density in the fundamental equation of dynamic MOE (DMOE = V²ρ, where V = acoustic velocity and ρ = density). Investigation included measurements with boards in the laboratory considering moisture contents below and above FSP as well as temperatures below and above 0°C. This also included field measurements of trees in contrasting climate sites and over different seasons including a long drought. Methods for measuring green density and moisture content and the patterns of variation of these parameters were also investigated. A secondary component of this thesis explored the wood quality and some mechanisms of tree response to water stress in two contrasting sites in terms or rainfall and water deficits in a region of Australia. The large increases in DMOE for frozen wood above the FSP (4.5 to 6 GPa) will limit the use of DMOE for grading logs in regions with freezing winters. Results from the experiment remeasuring young trees and the upper range of moisture content and temperatures above 0°C from the experiment with boards showed small to moderate variation in DMOE (0.1 to 1 GPa) which calls for further investigation on analytical procedures for adjustment of DMOE. Such procedures should consider that variations in acoustic velocity and density with changes in moisture content are not proportional and that there are counteracting effects between the two parameters. It remains to be investigated whether the typical variation (under normal climate conditions) in sapwood green density observed in our experiments has some implications for the use of DMOE. On the other hand, it is anticipated that the large differences along the stem and among stands in whole-section green density may bias DMOE measurements in logs for resource assessment. This also needs to be investigated. A comparison between acoustic velocity alone and DMOE for resource assessment under different scenarios is recommended. The study in two contrasting climate sites (high-altitude vs. warm-dry) in the Hume region of Forests NSW, Australia, including young (10-11 years) and mature trees (34 36 years) of radiata pine showed distinctive short and long-term responses of trees to cope with the water-limiting environment. In response to long-term water deficits the warm-dry site developed heartwood and thus reduced sapwood earlier and at faster rates than the high-altitude site. The onset of heartwood formation seemed to be triggered by some site threshold for water use as broadly indicated by the sapwood area/ha. The latter was consistently lower for the warm-dry site across the different stands. The warm-dry site also showed increased short-term responses to water stress and these were interpreted as seasonal mechanisms of the trees to cope with the limiting environment. The trees compensated for the lower available moisture and higher transpiration rates by lowering their saturation and disrupting water conduction at some points (cavitation). The inverse trends of cavitation spots and cavitation bands with height in the stem suggested the trees have different strategies to sacrifice conducting xylem depending on the position on the stem. Finally, it is suggested that saturation tended to fall to critical 'safe' levels as a result of water stress and this varied depending on age, site, and position in the stem. Significant decreases in DMOE and basic density were observed for the warm-dry site and were attributed to lower proportions of latewood due to lower rainfall for that site during the period of latewood formation. These showed no obvious association with any of the long-term water-stress traits (sapwood percentage and number of heartwood rings).