Canopy tree populations in mesic savannas are often bimodal with few saplings but many smaller individuals of indeterminate age that repeatedly suffer topkill and regenerate from underground tissues. Little is known about growth rates or mechanisms that allow subadult trees to reach the canopy. The wooded savannas of northern Australia have high frequencies of dry-season fires. In a 32 400-m2 field experiment, 2405 juveniles (<150-cm height) and saplings (150–499 cm) of the eucalypt canopy species were individually marked and measured the year prior to fires set in three different seasons and again at the end of the growing season (without fires) a year later. Trees in unburnt plots served as controls. All fire treatments were repeated in plots dominated by the most common understorey, a native annual grass (sorghum) and in plots dominated by perennial native species; these produce different fuels for fires and competitive regimes for young trees. After early dry-season fires, height growth of larger juveniles and all saplings was significantly enhanced, especially in sorghum. After late dry- or wet-season fires, juvenile trees grew well, but all of the small saplings (150- to 299-cm height) were reduced to ‘juveniles’ and did not recover pre-fire heights but, instead, produced many new basal (coppice) stems. Late, dry-season fires reduced more than 80% of large saplings (300–499 cm) to juvenile size in sorghum, whereas in non-sorghum, 60% of the trees grew to poles (500–999 cm). The results demonstrate that juvenile and sapling growth responses to fire and the probability of subadult trees reaching the canopy are related to fire–understorey interactions, and suggest that the mechanisms include morphological and carbohydrate storage dynamics which vary with tree size and life history stage. The key to successful management of a sustainable woody canopy lies in the understorey.