Northern red oak (Quercus rubra L.) and yellow-poplar (Liriodendron tulipifera L.) were grown for two years in full sunlight (unshaded) or 20% of full sunlight (shaded) under either well-watered or drought conditions. There was a close association between evaporative flux (in situ) and leaf-specific conductivity (LSC) in stem segments of both species. Shaded, drought-stressed seedlings of both species had significantly reduced leaf area, evaporative flux, volume flow rate in xylem, flow velocity, potentially functional xylem area, and LSC than unshaded, well-watered seedlings. Reductions in LSC associated with drought or shade were similar for both species; and within a treatment, both species had similar LSC. Species differed in the manner of LSC adjustment to drought and shade. Reductions in leaf area associated with drought or shade were accompanied primarily by reductions in potentially functional xylem area for L. tulipifera, and by reductions in flow velocity for Q. rubra. These results suggest (1) the existence of a homeostatic balance between evaporative flux and LSC, (2) that species with widely different growth patterns and xylem anatomies may develop similar LSC within the same environment, and (3) a possible hydraulic basis for differences in habitat between ring- and diffuse-porous species.