Eucalyptus incrassata is frequently found on soils subject to periodic waterlogging, some of which contain high salt concentrations. In contrast, E. diversifolia and E. oleosa are found only on freely draining, non-saline soils. The relative physiological tolerances of the three species to waterlogging and salinity were investigated by pot experiments. No conclusive differences in tolerance to waterlogging were demonstrated, but E. incrassata was markedly more tolerant of high levels of substrate salinity than E. divevsifolia. It is suggested that this difference in physiological tolerance explains the presence of E. incrassata on saline soils and the absence of E. divevsifolia from such soils in the field.