The tallest trees of Cryptomeria japonica occur in climatic regions similar to the world's tallest trees. We hypothesized that tall C. japonica trees would have evolved adaptive mechanisms to overcome height growth limitation. Here, we focused on foliar water storage, a mechanism recently discovered in Sequoia sempervirens. In C. japonica, leaf water potential at turgor loss did not change with height or light availability, while leaf hydraulic capacitance and succulence (water content per leaf surface area) increased, suggesting hydraulic compensation. Plasticity of leaf morphology could contribute to avoiding negative effects of height on photosynthesis. We also focused on the structure and function of transfusion tissue in leaves and its role in water storage and supply. Cross-sectional area of transfusion tissue increased with height, whereas that of xylem was constant. We confirmed that water flowed from vascular bundle to mesophyll via the transfusion tissue. Cryo-scanning electron microscopy images of leaf cross sections showed that transfusion cells were flattened, but not fully dehydrated when leaf water potential decreased in situ and by experimental dehydration, and cell deformation was more marked for treetop leaves than for lower-crown leaves. The shape of transfusion cells recovered at predawn as well as after experimental rehydration. As in S. sempervirens, transfusion tissue of C. japonica may function as a hydraulic buffer, absorbing and releasing water according to leaf water status. Anatomical and hydraulic properties contributing to foliar water storage may be an adaptive mechanism acquired by tall Cupressaceae trees to overcome the hydraulic constraints on physiological function with increasing height.