The regulation of vascular ray differentiation has received limited attention, despite the fact that vascular rays constitute an important part of the secondary body of plants. In this paper we review developmental aspects of the ray system and suggest a general hypothesis for the regulation of ray differentiation and evolution. In studies of ray differentiation, two basic factors should be taken into consideration: 1) the normal gradual increase in ray size in relation to age, distance from the pith, and distance from the young leaves; and 2) the influence of wound effects on the size, structure, and spacing of rays. The relationships between the rate of cambial activity and secondary xylem differentiation are not clearly understood. There are contrasting results on the relationships between ray number and rate of radial growth. The rate of radial growth (= rate of cambial activity) is not the regulating mechanism of ray characteristics. Bunning (1952, 1965) proposed that rays are distributed regularly in the tissue, as the outcome of an inhibitory influence expressed by them. However, Bunning’s hypothesis contradicts a basic feature of the vascular ray system, namely, fusion of rays. Detailed histological studies of the secondary xylem revealed that proximity to and contact with rays plays a major role in the survival of fusiform initials in the cambium (Bannan, 1951, 1953). Such evidence led Ziegler (1964) to suggest that since the cambium is supplied predominantly via the rays, this is an effective feedback regulative system for an equidistant arrangement of the rays. The hypothesis that rays are induced and controlled by a radial signal flow seems to be the best explanation for the structure and spacing of rays. The formation of a polycentric ray—a special case of “ray” initiation inside a vascular ray—supports the idea that radial signal flow occurs within the rays (Lev-Yadun & Aloni, 1991a). This idea is also supported by findings fromQuercus species in which aggregate rays in the xylem disperse naturally in branch junctions and, following partial girdling, leave a longitudinal narrow bridge of cambium and bark as a result of enhanced axial signal flow (of auxin and other growth regulators) (Lev-Yadun & Aloni, 1991b). The longitudinally elongated shape of rays is their response to axial signal flows (mainly the polar auxin flow). Two methods have been used to study the evolution of the ray system: 1) statistical studies of the relationships between vessel and ray characteristics in many species, when vessel characteristics were the evolutionary standard, and 2) comparison of ray characteristics in fossils originating from several geological eras. We suggest that evolution of the ray system reflects changes in the relations between radial and axial signal flows.