Competition for resources often induces shifts in biomass allocation among plant parts resulting in long-term structural differences between neighbouring individuals in perennial communities. To study the morphological responses of red alder (Alnus rubra) to water availability, predawn plant water potential and stem and branch growth were measured every 2 weeks on 4-year-old trees planted at spacings ranging from 0.10 to 41.99 m2 tree-1. Tree and branch samples were destructively analysed to determine biomass and leaf area, and regression equations were developed to predict biomass of tree components. These predictions were used to examine differences in growth and biomass allocation among trees at different levels of intraspecific competition. Decreased red alder spacing produced reductions in mean leaf area, height, basal diameter, above-ground biomass and above-ground biomass relative growth rate. A strong negative exponential relationship existed between mean total above-ground biomass relative growth rate and both the water stress integral (Spsi) and periodic predawn water stress. Relative growth rate declined sharply at a water-stress level of between -0.3 and -0.4 MPa. The combination of sensitivity to water stress and high rates of biomass production in mesic environments suggests that red alder's water-stress avoidance syndrome is a major factor in its high growth rate.