Laurel wilt, a lethal vascular wilt disease caused by the fungus Raffaelea lauricola, affects several tree species in the Lauraceae, including three Persea species. The susceptibility to laurel wilt of two forest tree species native to the southern USA, Persea borbonia and Persea palustris, [(Raf.) Sarg.] and avocado, Persea americana (Mill.) cv Waldin, was examined and related to tree physiology and xylem anatomy. Net CO2 assimilation (A), stomatal conductance (gs), leaf chlorophyll index (LCI), leaf chlorophyll fluorescence (Fv/Fm), xylem sap flow, theoretical stem hydraulic conductivity (Kh) and xylem vessel anatomy were assessed in trees of each species that were inoculated with R. lauricola and in control trees. Laurel wilt caused a reduction in A, gs, LCI, Fv/Fm and blockage of xylem vessels by tyloses formation that negatively impacted Kh and sap flow in all Persea species. However, disease susceptibility as indicated by canopy wilting and sapwood discoloration was less pronounced in P. americana cv Waldin than in the two forest species. Xylem vessel diameter was significantly smaller in P. borbonia and P. palustris than in P. americana cv Waldin. Differences in laurel wilt susceptibility among species appear to be influenced by physiological and anatomical tree responses.