The plant root xylem comprises a specialized tissue for water distribution to the shoot. Despite its importance, its potential morphological plasticity in response to environmental conditions such as limited water availability has not been thoroughly studied. Here, we identify a role for the phytohormone abscisic acid (ABA) for proper xylem development and describe how ABA signalling-mediated effects on core developmental regulators are employed to alter xylem morphology under limited water availability in Arabidopsis Plants with impaired ABA biosynthesis and reduced ABA signalling in the cell layer surrounding the vasculature displayed defects in xylem continuity, suggesting that non-cell autonomous ABA signalling is required for proper xylem development. Conversely, upon external ABA application or under limited water availability, extra xylem strands were formed. The observed xylem developmental alterations were dependent on adequate endodermal ABA signalling, which activated MIR165A. This resulted in increased miR165 levels that repress class III HD-ZIP transcription factors in the stele. We conclude that a pathway known to control core developmental features is employed as a means of modifying plant xylem morphology under conditions of environmental stress.