Tree planting is often considered an environmentally `friendly' option for water table control in irrigation areas where water tables are shallow. This paper presents and discusses tree/water table interactions at two sites in Kyabram, Northern Victoria, Australia: one non-irrigated and planted to a range of Eucalyptus spp. and the other irrigated and planted to E. grandis at variable spacings. The non-irrigated (except for the first 7 years after planting) plantation was established in 1976. A network of observation bores and piezometers was installed in 1982. During the monitoring period 1982–1993, water tables underneath the plantation were lowered by between 2 and 4 m, compared with the adjacent paddocks. However, the impact of the trees on the piezometric levels, measured in the aquifer underneath the plantation, was less pronounced. The trees reversed the hydraulic gradient underneath the plantation, essentially converting the plantation site into a `sub-surface discharge area.' This resulted in a build-up of soil salinity under the trees over 1984–1994. Salinity also increased in the groundwater under the plantation. A similar hydraulic gradient reversal effect was found under the irrigated variable spacing tree site. About 4 years after planting, the higher tree density (3 m spacing interval) started to lower the water table and 2 years later a similar result was found in the 7.3 m spaced trees. The deeper (10 m) piezometric pressure was not affected at any of the tree densities. This lack of impact on deeper piezometric pressures, combined with the lowering of the water table, caused a reversal of the hydraulic gradient under the high density trees (3 m spacing) 5 years after planting, which was conducive to salt movement to the base of the root zone. In spite of irrigation water being applied, the trees progressively lowered the water table, with high-density trees showing the greatest effect. It is concluded that the low transmission characteristics of the soils restrict the depth of wetting from both irrigation and rainfall, leaving uptake from the capillary fringe above the water table to supply additional transpiration in coping with demand. The long-term sustainability of deep-rooted tree plantings growing on shallow water tables is questioned; engineering mechanisms such as groundwater pumps or tile drains may be needed to sustain long-term tree growth under these conditions.