This study deals with the effect of dwarf growth for the wood and the structural changes of cambium in Pinus koraiensis subjected to water stress. The length and wall thickness of tracheary elements in dwarf trees was shorter and thicker than that in normal trees. The redial width and cell number of the annual rings are narrower and smaller in dwarf trees than those in normal trees. In serial tangential sections, the frequency of anticlinal division is low and loss of cambial initials is small in dwarf trees. The length of cambial initials in water deficit, trees are slightly shorter than that in normal trees, and the instructive growth of cambial initials during differentiation of xylem mother cells is inactive in dwarf trees. Thus, it is interpreted that the shortening of tracheary elements in dwarf trees is due to the fact that the length of cambial initials are shortened and the intrusive growth of those during differentiation of xylem mother cells is inactive. The structural variations in the wood of naturally occurring dwarf trees are similar to those of trees subjected to artificial water stress. Therefore, it is suggested that the variation of xylem element in dwarf trees are related to water conditions.