Populus is presented as a model system for the study of wood formation (xylogenesis). The formation of wood (secondary xylem) is an ordered developmental process involving cell division, cell expansion, secondary wall deposition, lignification and programmed cell death. Because wood is formed in a variable environment and subject to developmental control, xylem cells are produced that differ in size, shape, cell wall structure, texture and composition. Hormones mediate some of the variability observed and control the process of xylogenesis. High-resolution analysis of auxin distribution across cambial region tissues, combined with the analysis of transgenic plants with modified auxin distribution, suggests that auxin provides positional information for the exit of cells from the meristem and probably also for the duration of cell expansion. Poplar sequencing projects have provided access to genes involved in cell wall formation. Genes involved in the biosynthesis of the carbohydrate skeleton of the cell wall are briefly reviewed. Most progress has been made in characterizing pectin methyl esterases that modify pectins in the cambial region. Specific expression patterns have also been found for expansins, xyloglucan endotransglycosylases and cellulose synthases, pointing to their role in wood cell wall formation and modification. Finally, by studying transgenic plants modified in various steps of the monolignol biosynthetic pathway and by localizing the expression of various enzymes, new insight into the lignin biosynthesis in planta has been gained.