The leaf-specific hydraulic conductivity (KL) of plant stems can control leaf water supply. This property is influenced by variation in leaf/sapwood area ratio (AL/AS) and the specific hydraulic conductivity of xylem tissue (KS). In environments with high atmospheric vapor pressure deficit (VPD), KL may increase to support higher transpiration rates. We predicted that saplings of Acerrubrum and A.pensylvanicum grown in forest canopy gaps, under high light and VPD, would have higher KL and lower AL/AS than similar sized saplings in the understory. Leaf-specific hydraulic conductivity and KS increased with sapling size for both species. In A. rubrum, KS did not differ between the two environments but lower AL/AS (P=0.05, ANCOVA) led to higher KL for gap-grown saplings (P < 0.05, ANCOVA). In A.pensylvanicum, neither KS, AL/AS, nor KL differed between environments. In a second experiment, we examined the impact of sapling size on the water relations and carbon assimilation of A.pensylvanicum. Maximum stomatal conductance for A.pensylvanicum increased with KL (r2=0.75, P < 0.05). A hypothetical large A.pensylvanicum sapling (2 m tall) had 2.4 times higher KL and 22 times greater daily carbon assimilation than a small (1 m tall) sapling. Size-related hydraulic limitations in A.pensylvanicum caused a 68% reduction in daily carbon assimilation in small saplings. Mid-day water potential increased with A.pensylvanicum sapling size (r2=0.69, P < 0.05). Calculations indicated that small A.pensylvanicum saplings (low KL) could not transpire at the rate of large saplings (high KL) without reaching theoretical thresholds for xylem embolism induction. The coordination between KL and stomatal conductance in saplings may prevent xylem water potential from reaching levels that cause embolism but also limits transpiration. The KS of the xylem did not vary across environments, suggesting that altering biomass allocation is the primary mechanism of increasing KL. However, the ability to alter aboveground biomass allocation in response to canopy gaps is species-specific. As a result of the increase in KL and KS with sapling size for both species, hydraulic limitation of water flux may impose a greater restriction on daily carbon assimilation for small saplings in the gap environment.