Abstract The influence of soil moisture content on leaf dynamics and insect herbivory was examined between September 1991 and March 1992 in a river red gum (Eucalyptus camaldulensis) forest in southern central New South Wales. Long-term observations of leaves were made in trees standing either within intermittently flooded waterways or at an average of 37. 5m from the edge of the waterways. The mean soil moisture content was significantly (P≤0.05) greater in the waterways than in the non-flooded areas. Trees in the higher soil moisture regime produced significantly larger basal area increments and increased canopy leaf area. This increase in canopy leaf area was achieved, in part, through a significant increase in leaf longevity and mean leaf size. Although a greater number of leaves was initiated and abscissed per shoot from the non-flooded trees, more leaves were collected from litter traps beneath the denser canopies of the flooded trees. Consumption of foliage by insects on the trees subjected to flooding compared to the non-flooded trees was not significantly different. However, the relative impact of insect herbivory was significantly greater on the non-flooded trees. Leaf chewing was the most common form of damage by insects, particularly Chryso-melidae and Curculionidae. No species was present in outbreak during this study. Leaf survival decreased as the per cent area eaten per leaf increased. In addition, irrespective of the level of herbivory, leaf abscission tended to be higher in E. camaldulensis under moisture deficit. The influence of soil moisture content on the balance between river red gum growth and insect herbivory is discussed.