Recent studies suggest that savanna trees in semi-arid areas can increase understorey plant production. We hypothesized that one of the mechanisms that explains the facilitation between trees and grasses in East African savannas is hydraulic lift (HL). HL in large Acacia tortilis trees was studied during the first 3 months of the dry season during a relatively wet year (1998) and a very dry year (2000). In 1998, we found distinct diel fluctuation in soil water potential (psi(s)), with increasing values during the night and decreasing again the following day. These fluctuations in psi(s )are consistent with other observations of HL and in A. tortilis were found up to 10 m from the tree. In 2000, during a severe drought, psi(s) measurements indicated that HL was largely absent. The finding that HL occurred in wetter years and not in drier years was supported by data obtained on the delta(18)O values in soil, rain and groundwater. The delta(18)O of water extracted from the xylem water of grasses indicated that when they grew near trees they had values similar to those of groundwater. This could be because they either (1) use water from deeper soil layers or (2) use hydraulically lifted water provided by the tree; this was not seen in the same grass species growing outside tree canopies. While our data indicate that HL indeed occurs under Acacia trees, it is also true that psi(s) was consistently lower under trees when compared to outside tree canopies. We believe that this is because tree-grass mixtures take up more water from the upper soil layers than is exuded by the tree each night. This limits the beneficial effect of HL for understorey grasses and suggests that in savannas both facilitation via HL and competition are active processes. The importance of each process may depend upon how wet or dry that particular site or year is.