ABSTRACT Toothed leaf margins are common (∼36%) in the New Zealand indigenous flora, and are most abundant in cool forests with high rainfall. Toothed margins are often associated with hydathodes, specialised structures that release water and solutes to maintain positive xylem pressure. However, the presence of hydathodes is mainly known from herbaceous plants. Here we investigate the presence and morphology of hydathodes in indigenous woody species representing 25 families, 33 genera and 57 species, with toothed and entire leaf margins. We tested whether toothed leaf margins on predominantly evergreen species are associated with hydathodes. Two types of structures on leaves were recognised: laminar hydathodes, water pores larger than normal stomata and associated with veins, and hydathodes positioned at the terminus of leaf teeth serviced by principal veins. Laminar hydathodes occur more frequently, but not exclusively, on toothed leaves (on 61.8% of toothed species vs. 48.0% of entire-margined species). Leaf tooth hydathodes are complex structures with undifferentiated, porous tissue plugs linked to splayed vein termini of vessel elements and often form a distinctive cap on leaf teeth. Tooth hydathodes occur on ∼90% of the serrated leaves species sampled. Ontogenetic differences in hydathode occurrence were noted in Alectryon excelsus as leaf morphology changes with plant age from a serrated to a non-serrated form. Quintinia acutifolius showed a similar pattern between individuals with different leaf morphologies. In our sampled dataset, tree species with any type of hydathode occur in areas with a higher ratio of rainfall to potential evapotranspiration than tree species without hydathodes. This pattern was not observed in shrubs. The strong association between marginal hydathodes and toothed leaves in New Zealand trees, plus the association with higher rainfall environments, suggests that these structures function to release hydraulic water pressure in plants on periodically saturated soils in high rainfall zones.