The development and growth of plants, as well as their successful adaptation to a variety of environments, is highly dependent on the conduction of water, nutrients and other important molecules throughout the plant body. Xylem is a specialized vascular tissue that serves as a conduit of water and minerals and provides mechanical support for upright growth. Wood, also known as secondary xylem, constitutes the major part of mature woody stems and roots. In the past two decades, a number of key factors including hormones, signal transducers and (post)transcriptional regulators have been shown to control xylem formation. We outline the main mechanisms shown to be essential for xylem development in various plant species, with an emphasis on Arabidopsis thaliana, as well as several tree species where xylem has a long history of investigation. We also summarize the processes which have been shown to be instrumental during xylem maturation. This includes mechanisms of cell wall formation and cell death which collectively complete xylem cell fate.