As a tree grows taller, the increase in gravitational pressure and path length resistance results in lower water potentials at a given flow rate and higher carbon construction costs to transport a given amount of water to the leaves. We investigated how hydraulic safety and efficiency are coordinated under the constraints of higher cavitation risks and higher carbon construction costs with increasing tree height. We combined measurements of xylem tracheid anatomical traits with the vulnerability to drought-induced embolism and hydraulic conductivity of the apical shoots of 2- to 37-m tall Picea abies trees growing at two sites in the Dolomites (Italian Eastern Alps). We found that the theoretical hydraulic conductivity of the apical shoots increased with tree height at both sites (P < 0.001) as a result of an increase in either total tracheid number or mean hydraulic diameter. The xylem water potential inducing 50% loss of apical conductance significantly increased from small (−4.45 ± 0.20 MPa) to tall trees (−3.65 ± 0.03 MPa) (P = 0.007). The more conductive xylem at the treetop of taller trees allows the full compensation for the height-related hydraulic constraints and minimizes the additional carbon costs of transporting water over a longer path length. The corresponding increase in vulnerability to cavitation shows that hydraulic efficiency is prioritized over safety during height growth.