Paclobutrazol is a tree growth regulator that is frequently applied by arborists to control tree growth in utility rights of way. Paclobutrazol is also marketed to mitigate tree stresses associated with urban environments. In this study we applied paclobutrazol as a soil drench to honeylocust (Gleditsia triacanthos L var. inermis (L.) Zab.) and Callery pear (Pyrus calleryiana Decne.) trees planted as street trees on two sites in Lansing, Michigan USA. We evaluated physiological and morphological responses for two years after treatment. Application of paclobutrazol increased SPAD chlorophyll index of trees of both species in both years, compared to untreated control trees. Application of paclobutrazol increased leaf water potential of trees on one study site (Downtown) but not the other (Old Town). Paclobutrazol increased gas exchange (net photosynthesis and stomatal conductance) of Callery pear trees on one of four measurement dates (gas exchange was not measured on honeylocust trees). Leaf size of Callery pear trees was reduced following paclobutrazol application whereas leaf size of honeylocust trees was unaffected by paclobutrazol. These results indicate that paclobutrazol can help to reduce stress of trees and improve physiological function under urban conditions. However, paclobutrazol should be viewed as part of a suite of options for arborists and landscapers to manage trees on stressful sites, rather than as a replacement for proper overall care.