It is easy to measure annual growth of a tree stem. It is hard to measure its daily growth. The reason for this difficulty is the microscopic scale and the need to separate processes that simultaneously result in reversible and irreversible stem expansion. Here we present a model that separates reversible from irreversible cell expansion. Our model is novel, because it explains reversible expansion as consequence of longitudinally and, importantly, radially transmitted changes of hydraulic and osmotic pressures in xylem and bark. To capture and quantify these changes, we manipulated daily stem growth by applying a phloem girdle to stems of 9-m tall trees. The model was informed by measurements of radial movement in stem tissues and sap flow before and after and positions below and above the girdle. Additional measurements of whole-crown fluxes of H2O and CO2, leaf water potentials, non-structural carbohydrates and respiration were used to document the physiological impacts of girdling. This work sheds new light on the role of radial transport processes underpinning daily growth of tree stems. The model helps explain diel patterns of stem growth in trees.