In this study, systematic variation in tree morphology across a rainfall gradient in Australia's tropical savanna biome and its implications for carbon stocks and dynamics were quantified. The aim was to support efforts to manage fire regimes to increase vegetative carbon stocks as a greenhouse gas mitigation strategy. The height of trees for a given trunk diameter declines with decreasing rainfall from 2000 to 300 mm and increasing dry season length across the Australian savanna biome. It is likely that increasing dry season length is the main driver of this decline rather declining rainfall per se. By taking account of the response of total basal area to rainfall and soil type, stand structure, and tree height and diameter relationships, the carbon stocks in live trees were estimated to decline from about 34 t ha−1 in the wetter savannas to 6 t ha−1 in the drier savannas. These values are broadly consistent with field-based estimates. Because of the declining ratio of height to trunk diameter, trees of a given diameter in drier regions will be more likely to be killed by fires of a given intensity than trees in wetter regions. Thus single fires of given intensity are likely to have a greater proportionate impact on live tree carbon stock in drier savannas, but a much greater absolute impact in wetter savannas due to the greater total carbon stock. Projected decreases in early wet season rainfall under climate change scenarios, despite projections of little change in total precipitation in northern Australia, may lead to decreased carbon stock in live trees through two mechanisms: a reduction in total basal area and decreases in tree height for given trunk diameters.