The use of trunk diameter fluctuations and their derived parameters for irrigation scheduling in woody crops is reviewed. The strengths and weaknesses of these continuously measured plant-based water stress indicators compared with other discretely measured indicators for diagnosing plant water status in young and mature trees are discussed. Aspects such as sensor reading variability, signal intensity and the relationship between trunk diameter fluctuations and plant water status are analyzed in order to assess their usefulness as water stress indicators. The physiological significance of maximum and minimum daily trunk diameter and maximum daily trunk shrinkage (MDS) are also considered. Current knowledge of irrigation protocols and baselines for obtaining maximum daily trunk shrinkage reference values is discussed and new research objectives are proposed. We analyze the response of woody crops to continuous deficit irrigation scheduled by maintaining MDS signal intensity at threshold values to generate mild, moderate and severe water stress and assess the possibility of using linear variable displacement transducer (LVDT) sensors in trunk as a precision tool for regulated deficit irrigation scheduling. Finally, the possibility of using MDS signal intensity as a tool to match the irrigation regime to tree water requirements is also reviewed.