Because of their prominent role in the global carbon balance and their possible carbon sequestration, trees are very important organisms in relation to global climatic changes. Knowledge of these processes is the key to understanding the functioning of the whole forest ecosystem which can he modelled and predicted based on the physiological process information. This paper reviews the major methods and techniques used to examine the likely effects of elevated CO2 on woody plants, as well as the major physiological responses of trees to elevated CO2. The available exposure techniques and approaches are described. An overview table with all relevant literature data over the period 1989-93 summarizes the percent changes in biomass, root/shoot ratio, photosynthesis, leaf area and water use efficiency under elevated CO2. Interaction between growth, photosynthesis and nutrition is discussed with a special emphasis on downward regulation of photosynthesis. The stimulation or reduction found in the respiratory processes of woody plants are reviewed, as well as the effect of elevated CO2 on stomatal density, conductance and water use efficiency. Changes in plant quality and their consequences are examined. Changes in underground processes under elevated CO2 are especially emphasized and related to the functioning of the ecosystem. Some directions for future research are put forward.