To investigate the effects of soil water content on growth and transpiration of Japanese cedar (Cryptomeria japonica D. Don) and Hinoki cypress (Chamaecyparis obtusa (Siebold et Zucc.) Endl.), potted seedlings were grown in well-watered soil (wet treatment) or in drying soil (dry treatment) for 12 weeks. Seedlings in the wet treatment were watered once every 2 or 3 days, whereas seedlings in the dry treatment were watered when soil water content (Theta; m3 m(-3)) reached 0.30, equivalent to a soil matric potential of -0.06 MPa. From Weeks 7 to 12 after the onset of the treatments, seedling transpiration was measured by weighing the potted seedlings. After the last watering, changes in transpiration rate during soil drying were monitored intensely. The dry treatment restricted aboveground growth but increased biomass allocation to the roots in both species, resulting in no significant treatment difference in whole-plant biomass production. The species showed similar responses in relative growth rate (RGR), net assimilation rate (NAR) and shoot mass ratio (SMR) to the dry treatment. Although NAR did not change significantly in either C. japonica or C. obtusa as the soil dried, the two species responded differently to the dry treatment in terms of mean transpiration rate (E) and water-use efficiency (WUE), which are parameters that relate to NAR. In the dry treatment, both E and WUE of C. japonica were stable, whereas in C. obtusa, E decreased and WUE increased (E and WUE counterbalanced to maintain a constant NAR). Transpiration rates were lower in C. obtusa seedlings than in C. japonica seedlings, even in well-watered conditions. During soil drying, the transpiration rate decreased after Theta reached about 0.38 (-0.003 MPa) in C. obtusa and 0.32 (-0.028 MPa) in C. japonica. We conclude that C. obtusa has more water-saving characteristics than C. japonica, particularly when water supply is limited.