Background and Aims. This study investigates the structural diversity of the secondary xylem of 54 species of 'Acacia' from four taxonomic sections collected across five climate regions along a 1200 km E-W transect from sub-tropical [approx. 1400 mm mean annual precipitation (MAP)] to arid (approx. 240 mm MAP) in New South Wales, Australia. 'Acacia sensu stricto' (s.s.) is a critical group for understanding the effect of climate and phylogeny on the functional anatomy of wood. Methods. Wood samples were sectioned in transverse, tangential and radial planes for light microscopy and analysis. Key Results. The wood usually has thick-walled vessels and fibres, paratracheal parenchyma and uniseriate and biseriate rays, occasionally up to four cells wide. The greater abundance of gelatinous fibres in arid and semi-arid species may have ecological significance. Prismatic crystals in chambered fibres and axial parenchyma increased in abundance in semi-arid and arid species. Whereas vessel diameter showed only a small decrease from the sub-tropical to the arid region, there was a significant 2-fold increase in vessel frequency and a consequent 3-fold decrease in the vulnerability index. Conclusions. Although the underlying phylogeny determines the qualitative wood structure, climate has a significant influence on the functional wood anatomy of 'Acacia s.s.', which is an ideal genus to study the effect of these factors.