Large, declining beech (Fagus sylvatica L.) trees (diameter at breast height = 50 cm), growing on heavy clay soils in the highlands near Zurich, Switzerland, were amply irrigated in late summer. During irrigation, the xylem sap flow rate, Q_wt, was measured by the stem-tissue heat balance method with internal heating and sensing. Only a gradual and slight increase in Q_wt in response to irrigation was observed in the control trees, whereas Q_wt in the declining trees, whose transpiration rates were only 2–20% those of the control trees, increased 2–5 times within minutes. This suggests, that severe local drought was the major factor limiting tree growth at the site. The extent of the response permits estimation of the supply-limited (soil water) and demand-limited (tree structure) components of stress. Drought caused a decline in Q_wt in the trees with short crowns and limited root systems that had originally been growing in dense canopies and had become suddenly exposed to full illumination as a result of a severe wind storm and thinning. Trees with deep, narrow, dense crowns, growing in more open places and adapted over a long period to high irradiance remained healthy during drought. Prolonged, periodic water shortage reduced the amount of foliage up to 90% but during drought stimulated the growth of fine roots in the surface and upper soil layers. The stem conductive systems of the declining trees were still partially functional.