Wood, the most abundant biological compound on earth, is of crucial importance for Humankind and Biosphere. Although tree rings and the process of xylogenesis that creates them have long been under the microscope of biologists, it is only recently that the invention of new techniques has made it possible to monitor the intra-annual dynamics of xylem formation by the cambium, along with the environmental conditions that influence it. In most regions of the world cambial activity follows a seasonal cycle. At the beginning of the growing season, when temperatures increase, the cambium resumes activity. During the growing season, new xylem cells produced by the cambium are undergoing profound transformations, passing through successive differentiation stages, which will enable them to perform their future functions in trees. Finally, at the end of the growing season, when climatic conditions deteriorate, cambial activity stops, soon followed by the cessation of all the differentiation processes. In this manuscript, after reviewing the biological basis of wood formation and describing the methods that allow its monitoring, we investigate and model the relationships between cambium phenology, tree-ring formation dynamics, tracheid differentiation kinetics, and the climatic factors. The results obtained are used to describe the coordination between stem growth in size and in biomass, as well as the relationships between the source (the canopy) and the main sink (the cambium) of carbon in trees. Finally, three promising research avenues are presented, exploring the relationships between: (1) the intra-annual dynamics of woody biomass production and gross primary productivity; (2) the intra-annual dynamics of water conduction in xylem and stem sap flow and stand evapotranspiration; (3) the kinetics of tracheid differentiation and the creation of the isotopic signals in tree-ring archives. In the context of accelerating global changes, it is crucial to investigate what is ruling tree-ring formation and wood production, in order to better evaluate how the ongoing modifications of the environmental factors are impacting trees, biogeochemical cycles, human societies, and ultimately the climate itself.