There is an increasing interest in eucalypt reforestation for a range of purposes in Australia, including pulp-wood production, carbon mitigation and catchment water management. The impacts of this reforestation on soil water repellency have not been examined despite eucalypts often being associated with water repellency and water repellency having impacts on water movement across and within soils. To investigate the role of eucalypt reforestation on water repellency, and interactions with soil properties, we examined 31 sites across the south-west of Western Australia with paired plots differing only in present land use (pasture v. plantation). The incidence and severity of water repellency increased in the 5–8 years following reforestation with Eucalyptus globulus. Despite this difference in water repellency, there were no differences in soil characteristics, including soil organic carbon content or composition, between pasture and plantation soils, suggesting induction by small amounts of hydrophobic compounds from the trees. The incidence of soil water repellency was generally greater on sandy-surfaced (<10% clay content) soils; however, for these soils 72% of the pasture sites and 31% of the plantation were not water repellent, and this was independent of measured soil properties. Computer modelling revealed marked differences in the layering and packing of waxes on kaolinite and quartz surfaces, indicating the importance of interfacial interactions in the development of soil water repellency. The implications of increased water repellency for the management of eucalyptus plantations are considered.