Three Eucalyptus species indigenous to Australia and successfully acclimatised in the subtropical and northern desert regions of Israel have been grown in pots. Two of them, which contained loess‐like desert soil, and one, which contained sandy soil, out of doors, have been exposed to extreme semi‐arid climatic conditions with only soil moisture under control. In each species one group has been kept at 15.5% and a second at 7% moisture. The groups grown in water deficient soil had a 31.0–42.8% smaller leaf area and a 2–4 fold lower transpiration rate, the values varying with species. When soil moisture was raised to the same level for the water deficient groups and the plants grown at field capacity an equal or a higher transpiration rate was obtained. This happened although both groups had been exposed to the same intensity of solar radiation and in spite of the significantly smaller leaf area in the groups grown in water deficient soil. In woody xerophytes grown in water deficient soil under arid conditions, the quantity of available soil moisture and the inherent biological properties of the species decide the rate of transpiration and not the area of the foliage or the intensity of solar radiation, or physical evaporation.