Water relations, stem girth, and crown vigour were measured in jarrah (EucalyptusmarginataDonn ex Sm.) trees in adjoining areas of healthy and dieback-affected forest. The soil-borne fungusPhytophthoracinnamomiRands was recovered from soils in the dieback areas, but not from neighbouring healthy forest. Trees on dieback sites were found to be more water stressed (with lower dawn water potentials and daytime stomatal conductances) than healthy trees on nearby areas free ofP.cinnamomi. Severe water stress usually preceded crown deaths by several weeks to months. Dawn water potential and midday stomatal conductance were the most useful nondestructive indicators of dieback severity in declining trees. Subjective assessment of crown form was slightly less reliable than water relations as a separator of dieback and healthy trees. Changes in trunk girth were the least sensitive indicators of dieback severity. Midday stomatal conductance is recommended as a useful tool for monitoring short-term changes in vigour of dieback-affected trees.