Small diameter branchlets and smooth barked stems and branches of most woody plants have chloroplasts. While the stems of several eucalypt species have been shown to photosynthesise, the distribution of chloroplasts has not been investigated in detail. The distribution of chloroplasts in branchlets (23 species) and larger diameter stems and branches with smooth bark (14 species) was investigated in a wide range of eucalypts (species of Angophora, Corymbia and Eucalyptus) using fresh hand sections and a combination of bright field and fluorescence microscopy. All species had abundant stem chloroplasts. In both small and large diameter stems, the greatest concentration of chloroplasts was in a narrow band (usually 100–300 µm thick) immediately beneath the epidermis or phellem. Deeper chloroplasts were present but at a lower density due to abundant fibres and sclereids. In general, chloroplasts were found at greater depths in small diameter stems, often being present in the secondary xylem rays and the pith. The cells of the chlorenchyma band were small, rounded and densely packed, and unlike leaf mesophyll. A high density of chloroplasts was found just beneath the phellem of large diameter stems. These trees gave no external indication that green tissues were present just below the phellem. In these species, a thick phellem was not present to protect the inner living bark. Along with the chlorenchyma, the outer bark also had a high density of fibres and sclereids. These sclerenchyma cells probably disrupted a greater abundance and a more organised arrangement of the cells containing chloroplasts. This shows a possible trade-off between photosynthesis and the typical bark functions of protection and mechanical strength.