| Summary: | Long-term studies of tree responses to drought stress help us to understand the capacity of species to adapt to their environment. In this study, we investigated how <i>Eucalyptus obliqua</i> adjusts physiological and morphological traits in response to seasonal and multi-year droughts. We monitored physiological and morphological traits over multiple years in undisturbed control and throughfall reduction plots in a eucalypt forest in south-eastern Australia. The throughfall reduction treatment did not induce significantly lower soil moisture in the throughfall reduction plots compared with the control plots. However, natural variability in precipitation and evaporative demand induced drought stress of varying intensity each summer in all plots. We observed a significant relationship between seasonal precipitation and leaf pre-dawn water potential (Ψ<sub>PD</sub>), with less precipitation over summer, resulting in a decline in Ψ<sub>PD</sub> and drought stress when Ψ<sub>PD</sub> fell below −0.75 MPa. <i>Eucalyptus obliqua</i> responded to short-term summer drought through rapid leaf osmotic adjustment which lowered the leaf water potential at the turgor loss point beyond the minimum leaf water potential. Morphological adjustments, such as the reduction of leaf area to sapwood area (higher Huber Value) were moderate during the measurement period and only occurred under severe drought stress (pre-dawn water potential < −1.2 MPa). Overall, <i>E. obliqua</i> responded to short-term mild drought stress through physiological trait plasticity, while morphological adjustment only occurred under a more severe water deficit.
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