Background In a context of climate change, phenotypic plasticity provides long-lived species, such as trees, with the means to adapt to environmental variations occurring within a single generation. In eucalyptus plantations, water availability is a key factor limiting productivity. However, the molecular mechanisms underlying the adaptation of eucalyptus to water shortage remain unclear. In this study, we compared the molecular responses of two commercial eucalyptus hybrids during the dry season. Both hybrids differ in productivity when grown under water deficit. Results Pyrosequencing of RNA extracted from shoot apices provided extensive transcriptome coverage - a catalog of 129,993 unigenes (49,748 contigs and 80,245 singletons) was generated from 398 million base pairs, or 1.14 million reads. The pyrosequencing data enriched considerably existing Eucalyptus EST collections, adding 36,985 unigenes not previously represented. Digital analysis of read abundance in 14,460 contigs identified 1,280 that were differentially expressed between the two genotypes, 155 contigs showing differential expression between treatments (irrigated vs. non irrigated conditions during the dry season), and 274 contigs with significant genotype-by-treatment interaction. The more productive genotype displayed a larger set of genes responding to water stress. Moreover, stress signal transduction seemed to involve different pathways in the two genotypes, suggesting that water shortage induces distinct cellular stress cascades. Similarly, the response of functional proteins also varied widely between genotypes: the most productive genotype decreased expression of genes related to photosystem, transport and secondary metabolism, whereas genes related to primary metabolism and cell organisation were over-expressed. Conclusions For the most productive genotype, the ability to express a broader set of genes in response to water availability appears to be a key characteristic in the maintenance o