We compared responses of cuttings and seedlings of Eucalyptus globulus Labill. subsp. globulus to water stress in a 9-week greenhouse experiment. Optimal water availability was achieved by watering pots daily to field capacity, and two water stress treatments were imposed by reducing watering frequency to every 6 or 14 days. Within each treatment, height growth rates of cuttings and seedlings were similar, but the water-stress treatments reduced growth rates by up to 15%. Diameter growth rates were 25% lower in cuttings than in seedlings under well-watered conditions and were reduced by water stress in both plant types. Under well-watered conditions, cuttings and seedlings used similar amounts of water, whereas seedlings had greater water use (up to 28.5%) than cuttings in both water-stress treatments. Shoot water relations of cuttings and seedlings were similar over a range of soil water contents. The responses of transpiration and stomatal conductance to soil water content were similar in cuttings and seedlings. At the end of the experiment, plants were left unwatered. Seedlings that had been preconditioned by watering every 14 days survived to lower soil water contents than seedlings from the well-watered treatment; however, cuttings from the water-stress treatments died at higher soil water contents than either seedlings from the same treatment or cuttings from the well-watered treatment. We conclude that exposure to moderate water stress does not effectively precondition cuttings, and that their ability to resist extreme water stress may be limited. These characteristics are probably associated with the root systems of cuttings which differ developmentally, architecturally and anatomically from the root systems of seedlings.