Although a substantial proportion of plant biomass originates from the activity of vascular cambium, the molecular basis of radial plant growth is still largely unknown. To address whether cytokinins are required for cambial activity, we studied cytokinin signaling across the cambial zones of 2 tree species, poplar (Populus trichocarpa) and birch (Betula pendula). We observed an expression peak for genes encoding cytokinin receptors in the dividing cambial cells. We reduced cytokinin levels endogenously by engineering transgenic poplar trees (P. tremula x tremuloides) to express a cytokinin catabolic gene, Arabidopsis CYTOKININ OXIDASE 2, under the promoter of a birch CYTOKININ RECEPTOR 1 gene. Transgenic trees showed reduced concentration of a biologically active cytokinin, correlating with impaired cytokinin responsiveness. In these trees, both apical and radial growth was compromised. However, radial growth was more affected, as illustrated by a thinner stem diameter than in WT at same height. To dissect radial from apical growth inhibition, we performed a reciprocal grafting experiment. WT scion outgrew the diameter of transgenic stock, implicating cytokinin activity as a direct determinant of radial growth. The reduced radial growth correlated with a reduced number of cambial cell layers. Moreover, expression of a cytokinin primary response gene was dramatically reduced in the thin-stemmed transgenic trees. Thus, a reduced level of cytokinin signaling is the primary basis for the impaired cambial growth observed. Together, our results show that cytokinins are major hormonal regulators required for cambial development.