Diel variation in specific hydraulic conductivity (ks) was recorded in petioles of two savanna tree species, Schefflera macrocarpa and Caryocar brasiliense, from central Brazil. These two species have compound leaves with long petioles (10–30 cm). In both species, petiole ks decreased sharply with increasing transpiration rates and declining leaf water potentials (ψL) during the morning. Petiole ks increased during the afternoon while the plants were still transpiring and the water in the non-embolized vessels was still under tension. Dye experiments confirmed that in both species diel variation in ks was associated with embolism formation and repair. When transpiration was prevented in individual leaves, their petiole ks and water potential remained close to their maximum values during the day. When minimum daily ψL on selected branches was experimentally lowered by 0.2–0.6 MPa, the rate of ks recovery during the afternoon was slower in comparison with control branches. Several field manipulations were performed to identify potential mechanisms involved in the refilling of embolized petiole vessels. Removal of the cortex or longitudinal incisions in the cortex prevented afternoon recovery of ks and refilling of embolized vessels. When distilled water was added to petiole surfaces that had been abraded to partially remove the cuticle, ks increased sharply during the morning and early afternoon. Evidence of starch to sugar conversion in the starch sheath cells surrounding the vascular bundles of the petioles was observed during periods of rapid transpiration when the abundance of starch granules in the starch sheath cells surrounding the vascular bundles decreased. Consistent with this, petiole sugar content was highest in the early afternoon. The most parsimonious explanation of the field observations and the experimental results was that an increase in osmotically active solutes in cells outside the vascular bundles at around midday leads to water uptake by these cells. However, the concurrent increase in tissue volume is partially constrained by the cortex, resulting in a transient pressure imbalance that may drive radial water movement in the direction of the embolized vessels, thereby refilling them and restoring water flow. This study thus presents evidence that embolism formation and repair are two distinct phenomena controlled by different variables. The degree of embolism is a function of tension, and the rate of refilling a function of internal pressure imbalances.