Trees are Tall Because Water Can Move Against Gravity

Source - USDA Forest Service

The Sequoia Sempervirens (commonly known as The California Redwood) tree species has the tallest tree in the world, reaching a height of 379.1 feet. This height, a bit short of the estimated 430 feet maximum possible height for a tree, is the result of the tree's ability to develop an internal structure that water can use to rise from tree roots to the topmost leaves of the tree.


Water Molecule

Source- H2O_molecule_scheme_of_dipole.png‎

The unique shape of the water molecule, the shape that makes the water molecule a "polar" molecule, is used by the tree to design its internal water supply system that moves water up the tree. Simply speaking, water moves up the tree because it is "attracted" to the sides of the channels that the tree has created in its internal structure.


Capillary Action

Source - davidnelson.md.

Capillary action is the phenomenon that raises water molecules closest to a vertical surface (of the sides of a tube) because the attraction between the water molecules and the surface material molecules is high and the tube is so small that the water in the tube is unable to form a water surface, as shown on the right. 
When there is a very very tiny or no water surface, then the condition exists (called Capillary action) that all the water  molecules on the surface are "pulled up" and water rises against gravity.
Water in a narrow tube continues to rise due to capillary action, till the forces of attraction (between the water molecules and molecules of the wall material) are able to support the column of water that is formed in the tube. Measurement of this attraction force and calculations of water weight have shown that the maximum height that capillary action can transport water, against the force of gravity, is about 430 feet. So no tree can be taller than 430 feet in height. 


Capillary action is also behind the ability of water to move through soil from high humidity locations to low humidity locations.


Tree Leaves & Branches Are Smallest at the top

Source-hollowcreektreefarm.com

In especially tall trees, the number of branches, the length of a branch, the number of leaves and the size of a leaf all reduce as the height increases. 
These differences with height are due to the amount of water that the tree has available at different heights. As less water is available at greater heights, there is less need for longer branches, lots of leaves and leaves of larger sizes, because transpiration needs are less at greater heights. 
This reducing volume of water with height, produces the typical conical shape of trees.