Neolamarckia cadamba is a fast-growing tropical hardwood tree that is used extensively for plywood and pulp production, light furniture fabrication, building materials, and as a raw material for the preparation of certain indigenous medicines. Lack of genomic resources hampers progress in the molecular breeding and genetic improvement of this multipurpose tree species. In this study, transcriptome profiling of differentiating stems was performed to understand N. cadamba xylogenesis. The N. cadamba transcriptome was sequenced using Illumina paired-end sequencing technology. This generated 42.49 G of raw data that was then de novo assembled into 55,432 UniGenes with a mean length of 803.2bp. Approximately 47.8% of the UniGenes (26,487) were annotated against publically available protein databases, among which 21,699 and 7,754 UniGenes were assigned to Gene Ontology categories (GO) and Clusters of Orthologous Groups (COG), respectively. 5,589 UniGenes could be mapped onto 116 pathways using the Kyoto Encyclopedia of Genes and Genomes (KEGG) pathway database. Among 6,202 UniGenes exhibiting differential expression during xylogenesis, 1,634 showed significantly higher levels of expression in the basal and middle stem segments compared to the apical stem segment. These genes included NAC and MYB transcription factors related to secondary cell wall biosynthesis, genes related to most metabolic steps of lignin biosynthesis, and CesA genes involved in cellulose biosynthesis. This study lays the foundation for further screening of key genes associated with xylogenesis in N. cadamba as well as enhancing our understanding of the mechanism of xylogenesis in fast-growing trees.