The daily cycle of night and day affects the physiology and behaviour of almost all living things. At a molecular level, many genes show daily changes in expression level, often providing adaptive benefit to the organism. The roles that such daily patterns of gene expression play in coordinating carbon allocation processes during wood development in trees are not fully understood. To identify genes with diurnal expression patterns in wood-forming tissues of field-grown Eucalyptus trees, we used a cDNA microarray to measure transcript abundance levels at roughly four-hour intervals throughout a diurnal cycle in two clonal hybrid eucalypt genotypes. Eight percent of genes on the microarray (217 out of 2608) exhibited diurnally influenced expression profiles. Affected genes included those involved in carbon allocation, hormone signalling, stress response and wood formation. Eucalyptus homologues of the central clock genes Circadian Clock Associated 1 (CCA1) and GIGANTEA (GI) were expressed in developing xylem tissues and cycled with a circadian rhythm in constant light. The presence of a functional biological clock and diurnal transcript abundance patterns during xylogenesis suggests important roles for temporal control of xylem development and metabolism in fast-growing plantation trees.