‘Hass’ avocado tree water use and the effects of water deficits on fruit development were assessed in New Zealand from 2017 to 2019. Avocado tree water use was quantified by sap flow measurement and the soil water balance method at three sites in the main avocado growing regions of the Bay of Plenty, Whangarei, and the Far North, New Zealand, with consideration of local differences in climate and soil type, and variation in tree fruit load, leaf area, crown size and orchard shaded area. The results showed that all three sites had similar patterns of tree water use relative to reference evapotranspiration (ETₒ), regardless of differences in soil type, showing the highest tree water use in January at 2.7 mm d⁻¹ and the lowest in June at 1.2 to 1.4 mm d⁻¹. Crop coefficients (Kc) were provided for each site, and the three sites had similar Kc values throughout the year, as all three orchards were considered mature, with >75% orchard shaded area. However, fruit load influenced tree water use. At all three sites, the Kc values increased from light to heavy fruit load, therefore, Kc values should be adjusted for variation in fruit load. The relationship between orchard shaded area and Kc was also considered, to provide a method for estimating Kc for orchards differing in tree size and spacing. Irrigation requirements were assessed in more detail at the avocado orchard in the Bay of Plenty, investigating the effects of any water deficits resulting from a lack of irrigation on tree physiology and fruit growth. Rainfall at the study site was variable over the three years, but each summer there was a dry period without any rainfall for more than two weeks that resulted in a significant decrease in soil water content if avocado trees were not irrigated. Tree fruit load was highly variable between years and trees within years, and increasing fruit load caused decreasing individual fruit weight and dry matter content. However, in the year with the highest average fruit load, a dry period occurred during early fruit development, causing fruit weight at harvest in the non irrigated treatment to decrease by 26.4 g per fruit, independently of the effects of fruit load on fruit weight. The trees responded to dry conditions by reducing stomatal conductance (gₛ) by 20%, resulting in a constant leaf water potential (Ψₗₑₐբ) above 0.25 MPa. This finding suggests that irrigation is important for New Zealand avocado production because photosynthetic activity and fruit growth can be reduced by even mild water stress during a dry period. In the Bay of Plenty with allophanic soil, irrigation of avocado trees is recommended when soil water content decreases below 0.40 m³ m⁻³ (-30 kPa of soil tension) at a depth of 30 cm. Adverse effects on gs and fruit growth caused by water stress may appear when soil water content decreases below 0.35 m³ m⁻³ (-50 kPa of soil tension). To gain a better understanding of how water stress affects fruit development, an experiment was conducted on potted avocado trees in a glasshouse over the summer of 2018-19. Vascular water flows were monitored in the shoot stems and fruit pedicels with external sap flow gauges, while fruit growth was monitored continuously using linear transducers (LTs). The fruit water balance was modelled as the sum of fruit transpiration and inward and outward vascular flows, and compared with actual fruit diameter growth over time while a period of water stress followed by re-watering was imposed. The results showed that water flows in one direction through shoot stems from the parent stem to leaves, while flow occurred in both directions at different times of day through the fruit pedicels. Fruit size fluctuated in a response to water movement, but overall, avocado fruit increased in size by 1.4 (±0.09 S.E.) cm³ d⁻¹ under well watered conditions. However, under water-stressed conditions, the plants showed a clear response to water stress with a reduction in gₛ, photosynthetic net assimilation (A), and sap flow within shoot stems of 60-70%. Fruit water inflow was also decreased by 31% and the outflow from fruit to the parent stem was increased by 65% under water stressed conditions. As a result, the fruit growth rate decreased to 0.4 (±0.06) cm³ d⁻¹ . After the period of water stress was ended by re-watering, the fruit growth rate of the water-stressed treatment recovered quickly, and vascular flows and fruit volume growth exceeded that of the non-stressed treatment. Final fruit size did not differ between the two treatments in this experiment. Avocado fruit growth is sensitive to water stress because of direct effects of stress on vascular flows of water to the developing fruit, and potentially indirect effects of stress on photosynthesis and phloem flows, mediated by an isohydric stomatal response to water potential. Further research to investigate the interacting contributions of phloem and xylem flows to fruit growth in avocado is recommended.