This study aimed at elucidating the process of cambial activity and wood formation in Acacia ehrenbergiana Hayne growing in the Al-Baha region of Saudi Arabia, has revealed that the vascular cambium was active for almost the whole year, producing phloem in two flushes (February-March and August-October), and xylem for about 11 months, with varying pace of cell division and differentiation. A close relationship existed between emergence of new leaves and initiation/acceleration of cambial activity and tissue differentiation. Monthly average of the maximum and mean daily temperature showed negative correlation with cambial-zone width. Relative humidity showed positive relationship with xylem differentiation. Leaf water deficit had an adverse effect on the cambial activity (r = -0.94, p < 0.01), xylem production (r = -0.93, p < 0.01) and phloem production (r = -0.97, p < 0.01). On the whole, moderate temperature, low water deficit and high relative humidity and rainfall favored cambial activity and vascular tissue formation. Annual production of xylem was about five times that of phloem. A. ehrenbergiana appears to be a drought-tolerant species by having narrow, dense and thick-walled vessels, thick-walled fibers, high wood density (0.9273 g cm(-3)), low vulnerability factor (4.20) and the capacity of thriving well at 35 to 47% water-saturation deficit.