We studied the interactive effects of elevated concentrations of CO2 and O3 on radial growth and wood properties of four trembling aspen (Populus tremuloides Michx.) clones and paper birch (Betula papyrifera Marsh.) saplings. The material for the study was collected from the Aspen FACE (free-air CO2 enrichment) experiment in Rhinelander (WI, USA). Trees had been exposed to four treatments [control, elevated CO2 (560 ppm), elevated O3 (1.5 times ambient) and combined CO2 + O3] during growing seasons 1998–2008. Most treatment responses were observed in the early phase of experiment. Our results show that the CO2- and O3-exposed aspen trees displayed a differential balance between efficiency and safety of water transport. Under elevated CO2, radial growth was enhanced and the trees had fewer but hydraulically more efficient larger diameter vessels. In contrast, elevated O3 decreased radial growth and the diameters of vessels and fibres. Clone-specific decrease in wood density and cell wall thickness was observed under elevated CO2. In birch, the treatments had no major impacts on wood anatomy or wood density. Our study indicates that short-term impact studies conducted with young seedlings may not give a realistic view of long-term ecosystem responses.