The vascular system in plants is induced and controlled by streams of inductive hormonal signals. Auxin produced in young leaves is the primary controlling signal in vascular differentiation. Its polar and non-polar transport pathways and major controlling mechanisms are clarified. Ethylene produced in differentiating protoxylem vessels is the signal that triggers lateral root initiation, while tumor-induced ethylene is a limiting and controlling factor of crown gall development and its vascular differentiation. Gibberellin produced in mature leaves moves non-polarly and promotes elongation, regulates cambium activity and induces long fibers. Cytokinin from the root cap moves upward to promote cambial activity and stimulate shoot growth and branching, while strigolactone from the root inhibits branching. Furthermore, the role of the hormonal signals in controlling the type of differentiating vascular elements and gradients of conduit size and density, and how they regulate plant adaptation and have shaped wood evolution are elucidated.