New shoot growth of Carpinus betulus `fastigiata' was treated with stockplant etiolation and stem banding treatments and sampled for anatomical study at intervals over a 16-week period of greening following etiolation. Shading effects on the anatomy of the stem were also investigated. Numerous anatomical changes were noted with stem age and stockplant treatment. Among these were etiolation effects on the lignification of the secondary xylem, thickness of the periderm, and an increase in the percentage of sclereid-free gaps in the perivascular sclerenchyma, Stem banding increased the widths of the cortex and pith. Concomitant propagation studies revealed significant etiolation, shading, and banding effects on rooting percentages and root numbers. Using multiple linear regression methods rooting capacity was modelled best by linear combinations of the widths of the pith, non-lignified secondary xylem, cortical parenchyma and periderm, as well as the percentage of gaps in the sclerenchymatic sheath remaining non-sclerified. It is proposed that the development of sclereids in potential rooting sites reduces rooting potential. The exclusion of light during initial shoot development retards sclereid development by up to 3 months following treatment, which correlates well with observed increases in the rooting potential of etiolated and/or banded stems.