New shoot growth of Carpinus betulus L. fastigiata was subjected to stock plant etiolation and stem banding (a 2.5-cm square of Velcro applied to the shoot base) treatments and sampled for histological study at intervals over a 16-week period of shoot development following etiolation. Effects of partial shading on histology of the stem were also investigated. Numerous histological changes were noted with stem development and stock plant treatment. Among these were a reduction in lignification of the secondary xylem and thickness of the periderm, and an increase in the percentage of sclereid-free gaps in the perivascular sclerenchyma with etiolation. Concomitant propagation studies revealed significant etiolation, shading, and banding effects on rooting percentages and root numbers. Rooting capacity was modelled using linear combinations of the widths of nonlignified secondary xylem, cortical parenchyma and periderm, as well as the percentage of gaps in the sclerenchymatic sheath remaining free of sclereids. 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 stems.