Stem diameter is one of the most commonly measured attributes of trees, forming the foundation of forest censuses and monitoring. Changes in tree stem circumference include both irreversible woody stem growth and reversible circumference changes related to water status, yet these fine-scale dynamics are rarely leveraged to understand forest ecophysiology and typically ignored in plot- or stand-scale estimates of tree growth and forest productivity. Here, we deployed automated dendrometer bands on 12–40 trees at four different forested sites—two temperate broadleaf deciduous, one temperate conifer, and one tropical broadleaf semi-deciduous—to understand how tree circumference varies on time scales of hours to months, how these dynamics relate to environmental conditions, and whether the structure of these variations might introduce substantive error into estimates of woody growth. Diurnal stem circumference dynamics measured over the bark commonly—but not consistently—exhibited daytime shrinkage attributable to transpiration-driven changes in stem water storage. The amplitude of this shrinkage was significantly correlated with climatic variables (daily temperature range, vapor pressure deficit, and radiation), sap flow and evapotranspiration. Diurnal variations were typically <0.5 mm circumference in amplitude and unlikely to be of concern to most studies of tree growth. Over time scales of multiple days, the bands captured circumference increases in response to rain events, likely driven by combinations of increased stem water storage and bark hydration. Particularly at the tropical site, these rain responses could be quite substantial, ranging up to 1.5 mm circumference expansion within 48 hours following a rain event. We conclude that over-bark measurements of stem circumference change sometimes correlate with but have limited potential for directly estimating daily transpiration, but that they can be valuable on time scales of days to weeks for characterizing changes in stem growth and hydration.