The course of the bark beetle-vectored fungus, Leptographium terebrantis S. J. Barras and T. J. Perry, in stemwood growth loss of declining pines in the southeastern United States was assessed in a 13-year-old loblolly pine (Pinus taeda L.) plantation near Eufaula, Alabama, U.S.A. Using stem inoculation as a surrogate for root infection, we hypothesized that L. terebrantis infection impairs sapwood function and thus limits the tree leaf area (A_L), new root production, and stemwood growth. Sterile toothpicks colonized by L. terebrantis at varying inoculum densities was used to elicit host growth responses. In the third year after inoculation, the root pathogen reduced the foliage moisture content, whole-tree leaf area (A_L), the ratio of A_L to tree sapwood area (A_S), and stemwood growth in trees receiving the high inoculation treatment relative to those receiving the low or medium inoculation treatments, or the wound or control treatments after seven months of water deficit. The absence of a similar response to water deficit among trees that were noninoculated, wounded, or inoculated at the low or medium densities suggests that, in the loblolly pine–L. terebrantis pathosystem at our study site, the physiological stress caused by water deficit and the high inoculum density was required for the pathogen to elicit a stemwood growth loss. Thus, in loblolly pine forests of the southeastern United States, where climate and soil conditions yield prolonged periods of physiological stress, the presence of L. terebrantis has the potential to reduce stand volume and widen the gap between the predicted and actual stemwood production.