Climate change is expected to increase the frequency of droughts in most tropical regions in the coming decades. A passive phenomenon called hydraulic redistribution (HR) allows some plant species to take up water from deep and wet soil layers and redistribute it in the upper dry layers where other plants and soil biota can benefit from it. In addition, soil fertilization, particularly potassium (K), may also affect drought-adaptive mechanisms and increase water use efficiency (WUE) on poor and acidic tropical soils. The present study aimed at quantifying the role of HR and K fertilization on both wood productivity and WUE for stemwood production (WUEp) of Eucalyptus grandis plantations in Brazil under ambient and reduced (-37%) throughfall conditions. Tree transpiration was measured using trunk sap flow sensors over 21 months, and HR was estimated from the reverse sap flow (RF) observed in shallow roots over 18 months. Tree biomass, hydraulic conductance, soil water storage from surface to the water table (down to 17 m), and leaf photosynthetic capacity were also assessed. Significant HR was detected over the whole year, even during the rainy seasons. Neither potassium fertilization nor throughfall exclusion affected the velocity of water transported by HR, probably because most trees reached water table. Nonetheless, some photosynthetic capacity parameters, including the maximum photosynthetic rate (Amax), increased in treatments with K addition. This higher Amax combined with an increased sapwood area index, was associated with an increase in water uptake by 30 %–50 % and WUEp by 300 % relative to K-deficient trees. We postulate that the increase in WUEp promoted by potassium fertilization was partly driven by an increase in biomass allocation to wood, at the expense of foraging organs (leaves and roots), because K addition alleviated constraints on light and water use. Our results indicate that fertilizing E. grandis plantations with K is beneficial to both wood