Eucalyptus (eucalyptus spp.) is a unique tree species because of its adaptability to water stress. Its water requirement is as high as 90 litres a day, but under stress conditions its roots can go underneath by 9 m. This study investigates the sensitivity of eucalyptus plantation to groundwater availability in middle Gujarat. The results show that the average gross return per hectare of Eucalyptus plantation was Rs. 222, 391; the net return was Rs. 85, 291, the net present value (NPV) was positive (Rs. 47, 563), the benefit-cost ratio 1.40 and the internal rate of return over 5%. The percentage change in overall water depth before three or five years and the present water depth was 28.01% within a one-kilometre area of the Eucalyptus plantation. Within an area of one to three kilometres, the percentage change in the overall water depth before three to five years and present water depth was 24.22%. This study shows that Eucalyptus plantations negatively impact groundwater availability.