When water flows through a constriction, air can come out of solution (i.e. it can exsolve). This phenomenon is manifested in the transpiration stream of plants. Observations of gas in functioning xylem prompted a hypothesis predicting the daily balance between air and water in wood: a sudden fall in water content at sunrise, followed by an increase in water content during the day. An extended record by time domain reflectometry of volumetric water content (VWC) every 2 h throughout a summer shows the detailed pattern of change of VWC during 25 individual days, giving good agreement with the hypothesis. This hypothesis has wide-ranging consequences for experiments using cut plant parts. Perfusing aqueous solutions through excised xylem also can exsolve air from the water, causing declines in flow. The location of such air was investigated in cryo-fixed perfused vine stems by cryo-scanning electron microscopy. Bubbles formed at residual walls of perforation plates in small vessels, and filled many large vessels. The input surface is revealed as a major source of exsolved air. Precautions to reduce this effect are outlined and discussed.