Well-marked differences, involving both the patterns of moisture movement and storage, have been found to separate the water relationships of yellow birch, Betula lutea Michx., in various stages of deterioration. The cumulative results of injection studies, root excavations, and an extended survey of the trends in moisture distribution in the species over a prolonged period, suggest that the locus of action of the disease is, in the first instance, in the roots, and that excessive rootlet mortalities in apparently healthy trees constitute the initial indication of a diseased condition in the species.