Wood can serve as a record of past climate, recording tree responses to changing conditions. It is also valuable in understanding tree responses to environment to optimise forest management. Stable carbon isotope ratios (δ13C), wood density and microfibril angle (MFA) are potentially useful wood property parameters for these purposes. The goal of this study was to understand how δ13C varied over time in response to cycles of soil drying and wetting and to variation in temperature in Eucalyptus nitens Deane & Maiden, in concert with wood density and MFA. δ13C increases did not necessarily occur when water stress was highest, but, rather, when it was relieved. Our hypothesis is that this was a result of the use of previously fixed carbohydrate reserves when growth and metabolic activity was resumed after a period of dormancy. MFA in particular showed concomitant temporal variation with δ13C. A peak in δ13C may not coincide temporally with an increase in water stress, but with a decrease, when higher growth rates enable the final incorporation of earlier stored photosynthate into mature wood. This has implications for using δ13C as a tool to understand past environmental conditions using radial measurements of wood properties. However, interpreting this data with other wood properties may be helpful for understanding past tree responses.