Plants have evolved genetic mechanisms to sense, modulate and modify developmental programs in response to the changing environment. This brings forth challenges in stably generating tissue patterns while simultaneously allowing amenability. Gene perturbation studies have identified molecular regulators that control fate specification and differentiation of various tissues. However, we lack a complete understanding of how these processes are influenced by the environment. In this thesis, using Arabidopsis xylem as a model, I show that developmental regulators that function in maintaining a stable growth pattern are also involved in the manifestation of phenotypic plasticity. We found that the generation of a robust xylem developmental program is dependent on a feed forward loop between components of the auxin signalling pathway and the master regulators of xylem development, class III Homeodomain Leucine-Zipper (HD-ZIP III) transcription factors (TFs). By directly activating an auxin signalling activator (MP) and repressor (IAA20), the HD-ZIP III TFs facilitate stable xylem patterning and development. We also show that alterations to the HD-ZIP III mediated xylem developmental program were caused non-cell autonomously by changes in levels and signalling of a key regulator of abiotic stress response, abscisic acid (ABA). The suppression and enhancement of ABA signalling resulted in lower and higher levels respectively of mir165, a known post transcriptional regulator of HD-ZIP III levels. Under conditions of enhanced ABA signalling we found that ABA also acts cell autonomously through master regulators of xylem differentiation, VASCULAR RELATED NAC-DOMAIN (VND) transcription factors. Furthermore, we show that both cell autonomous and non-cell autonomous pathways are employed during water deficit conditions to alter xylem morphology and differentiation rate, likely to enhance water uptake. Taken together, our results show that ABA’s influence on evolutionarily conserved development regulators is important for xylem developmental plasticity. The identification of genetic regulators that control plant phenotypic alterations to limited water availability such as those identified in this thesis will be important to develop tolerant varieties that can survive the extended periods of drought caused by the alarming rise in global temperatures.