We studied the growth and water balance of young plantations of Pinus radiata D. Don and Eucalyptus grandis W. Hill ex Maiden irrigated with effluent for 3 years in a climate of high net evaporation. The plantations were irrigated weekly with secondary-treated municipal effluent at the estimated water-use rate, or at nominally twice or half this rate. Control plots were irrigated with bore water at their estimated water-use rate. Both species grew rapidly when irrigated with either effluent or bore water. The eucalypts irrigated with effluent at the estimated water-use rate closed canopy in 24 months, and at 34 months, mean dominant height was 12.1 m, stand basal area was 12.2 m(2) ha(-1), volume was 51.2 m(3) ha(-1), LAI was 5.7, and foliage mass was 6.5 Mg ha(-1). The pines in the corresponding effluent treatment had not closed canopy by 34 months. At this time, mean height was 5.0 m, stand basal area was 9.6 m(2) ha(-1), volume was 29.7 m(3) ha(-1), LAI was 3.5, and foliage mass was 7.3 Mg ha(-1). Water use by eucalypts was consistently higher than by pines, commensurate with their more rapid early growth, but the difference was not in proportion to the difference in leaf area. In the third year (when the eucalypts had a closed canopy), the eucalypts used 22% more water than the pines, but the annual mean LAI of the eucalypts was three times greater than that of the pines. The results suggest that (1) plantation water use by the two species on the same site will be similar for the same stage of canopy development, (2) eucalypts are not inherently more profligate consumers of water than pines when soil water is not limiting, and (3) stomatal control limits growth and water use of E. grandis in arid environments.