Several previous studies have investigated the use of the stable hydrogen and oxygen isotope compositions in plant materials as indicators of palaeoclimate. However, accurate interpretation relies on a detailed understanding of both physiological and environmental drivers of the variations in isotopic enrichments that occur in leaf water and associated organic compounds. To progress this aim we measured δ18O and δ2H values in eucalypt leaf and stem water and δ18O values in leaf cellulose, along with the isotopic compositions of water vapour, across a north-eastern Australian aridity gradient. Here we compare observed leaf water enrichment, along with previously published enrichment data from a similar north Australian transect, to Craig–Gordon-modelled predictions of leaf water isotopic enrichment. Our investigation of model parameters shows that observed 18O enrichment across the aridity gradients is dominated by the relationship between atmospheric and internal leaf water vapour pressure while 2H enrichment is driven mainly by variation in the water vapour—source water isotopic disequilibrium. During exceptionally dry and hot conditions (RH < 21%, T > 37 °C) we observed strong deviations from Craig–Gordon predicted isotope enrichments caused by partial stomatal closure. The atmospheric–leaf vapour pressure relationship is also a strong predictor of the observed leaf cellulose δ18O values across one aridity gradient. Our finding supports a wider applicability of leaf cellulose δ18O composition as a climate proxy for atmospheric humidity conditions during the leaf growing season than previously documented.