The stems of vascular plants have several functions, including support of the plant, transport of water and minerals by the vascular system, and generation of energy through photosynthetic cells (in some plants). Some stems also function in food and water storage.

Stems arise in the apical meristem. The outer stem layer is the epidermis, the next layer is composed of vascular tissues, the next is the cortex of parenchyma cells, and at the center of the stem is the pith.

In herbaceous plants (for example, clover, potatoes, and wheat), the stem is soft and composed primarily of meristematic tissue. In woody plants, in contrast, the stems are hard, with secondary tissues formed after the primary tissues have been laid down. Secondary tissues arise from the vascular cambium, a thin layer of dividing cells between the xylem and phloem. The vascular cambium is responsible for the lateral growth in the diameter of the woody stem as the cells lay down secondary xylem toward the inside of the stem and secondary phloem toward the outside of the stem. Xylem becomes the wood of the stem, while phloem, together with a tough tissue called cork, becomes the bark of the stem. Between the phloem and cork is a thin layer of cells—the cork cambium—that produces the cork. Annual rings form from xylem tissue.

Monocots and dicots contrast in the construction of stem tissue. In monocot stems, the vascular bundles are scattered throughout the parenchyma. In dicot stems, the vascular bundles are arranged in a ring around the margin of the stem. Most of the interior dicot stem is occupied by pith. In both monocots and dicots, the xylem provides some structural support for the cell.

In woody stems, the apical meristem is embedded in the tip of the stem within a structure called the terminal bud. Along the side of the stem are smaller lateral buds from which new branches and twigs emerge. Leaves generally unfold at intervals along the stem as the terminal bud moves upward. The leaves are attached at points on the stem called nodes. Spaces between the nodes are called internodes. Openings called lenticels are found along woody stems. Lenticels function as pores to permit the exchange of gases between the stem tissue and surrounding air.