The resurrection plant Myrothamnus flabellifolia has the ability to recover from repeated prolonged and extreme desiccation cycles. During the dry state the inner walls of the xylem vessels seemed to be covered, at least partly, by a lipid film as shown by Sudan III and Nile Red staining. The lipid film apparently functioned as an ‘internal cuticle’ which prevented the adjacent parenchyma ray cells from complete water loss. The hydrophobic nature of the inner xylem walls was supported by the finding that benzene ascended as rapidly as water in the xylem of dry Myrothamnus branches. On watering, numerous lipid bodies were found in the water-conducting vessels, presumably formed from the lipid film and/or from lipids excreted from the adjacent living cells into the vessels. The presence of lipid bodies within the vessels, as well as the hydrophobic properties of the inner xylem walls, could explain the finding that the xylem pressure of hydrated, well watered plants (measured both under laboratory and field conditions with the xylem pressure probe) never dropped below c. −0.3 MPa and that cavitation occurred frequently at low negative xylem pressure values (−0.05 to −0.15 MPa). The xylem pressure of M. flabellifolia responded rapidly and strongly to changes in relative humidity and temperature, but less obviously to changes in irradiance (which varied between 10 and c. 4000 μmol m m−2 s−1). The morphological position of the stomata in the leaves could explain the extremely weak and slow response of the xylem pressure of this resurrection plant to illumination changes. Stomata were most abundant in the furrows, and were thus protected from direct sunlight. Simultaneous measurements of the cell turgor pressure in the leaf epidermal cells (made by using the cell turgor pressure probe) revealed that the xylem and the cell turgor pressure dropped in a ratio of 1:0.7 on changes in the environmental parameters, indicating a quite close hydraulic connection and, thus, water equilibrium between the xylem and cellular compartments. An increase in irradiance of c. 700 μmol m−2 s−1 resulted in a turgor pressure decrease from 0.63 to 0.48 MPa. Correspondingly, the cell osmotic pressure increased from 1.03 to 1.22 MPa. From these values and by assuming water equilibrium, the osmotic pressure of the xylem sap was estimated to be 0.25–0.4 MPa. This value seems to be fairly high but may, however, be explained by the reduction of the water volume within the vessels due to the floating lipid bodies.