The present study examined the water relations of wallum dry sclerophyll woodland on the lower north coast of New South Wales (NSW). Wallum is the regionally distinct vegetation of Quaternary dunefields and beach ridge plains along the eastern coast of Australia. Wallum sand masses contain large aquifers, and previous studies have suggested that many of the plant species may be groundwater dependent. However, the extent of this dependency is largely unknown, despite an increasing reliance on the aquifers for groundwater extraction. Fifteen species from five growth-form categories and seven plant families were investigated. The pre-dawn and midday xylem water potential (Ψₓ) of all species was monitored over a 20-month period from December 2007 to July 2009. Pressure-volume curve traits were determined for each species in late autumn 2008, including the osmotic potential at full (π₁₀₀) and zero (π₀) turgor, and bulk modulus of elasticity (ε). Carbon isotope ratios (δ¹³C) were determined in mid-autumn 2008 to measure water use efficiency (WUE). Comparative differences in water relations could be loosely related to growth forms. A tree (Eucalyptus 'racemosa' subsp. 'racemosa') and most large shrubs had low midday Ψₓ, π₁₀₀ and π₀, and high ε and WUE; whereas the majority of small and medium shrubs had high midday Ψₓ, π₁₀₀ and π₀, and low ε and WUE.However, some species of similar growth form displayed contrasting behaviour in their water relations (e.g. the herbs 'Caustis recurvata' var. 'recurvata' and 'Hypolaena fastigiata'), and such differences require further investigation. The results suggest that 'E. racemosa' subsp. 'racemosa' is likely to be groundwater dependent, and large shrubs such as 'Banksia aemula' may also utilise groundwater. Both species are widespread in wallum, and therefore have the potential to play a key role in monitoring ecosystem health where aquifers are subject to groundwater extraction.