Why this research MattersThe inner bark plays important roles in tree stems, including radial exchange of water with the xylem and translocation of carbohydrates. Both processes affect the water content and the thickness of the inner bark on a diurnal basis. For the first time, we simultaneously measured the diurnal variations in the inner bark thickness of hinoki cypress (Chamaecyparis obtusa) by using point dendrometers and those of local xylem potential by using stem psychrometers located next to the dendrometers to determine how these variations were related to each other, to phloem turgor and carbohydrate transport. We also estimated the axial hydrostatic pressure gradient by measuring the osmolality of the sap extracted from the inner bark. The inner bark shrunk during the day and swelled during the night with an amplitude related to day‐to‐day and seasonal variations in climate. The relationship between changes in xylem water potential and inner bark thickness exhibited a hysteresis loop during the day with a median lag of 2 h. A phloem turgor‐related signal can be retrieved from the diurnal variations in the inner bark thickness, which was higher at the upper than at the lower position along the trunk. However, a downward hydrostatic pressure gradient was only observed at dawn, suggesting diurnal variations in the phloem sap flow velocity.