The Lake Eyre Basin (LEB) is characterised by enormous stream flow variability, low rainfall, saline groundwater and at times saline surface water; conditions that demand flexible tree water use strategies in the riparian zone. In the lower reaches of the Diamantina River, the water sources and extraction patterns of Eucalyptus coolabah were examined using isotope data from xylem, soil water, groundwater and surface water. Additionally, soil chloride and matric potential data were used to infer zones of water availability for root uptake. It was found that despite their elevated salinity, groundwater and soil water formed a large proportion of the transpiration flux, with little contribution from standing pools of surface water. At two sites located on the dry floodplain, the data indicated E. coolabah relied substantially on groundwater with a salinity exceeding 30,000 mgL-1Cl. However, some dilution with fresher soil water was evident at most sites, highlighting the importance of flooding in replenishing soil water. Water extraction primarily occurred in the unsaturated zone where a compromise between salinity and source reliability was required. However, E. coolabah was found to have higher salinity tolerances than previously reported for Eucalyptus species.