Hybrid poplar (HP) is an important fast-growing crop with the potential to provide a reliable supply of biomass for the pulp and bioenergy industries while also sequestering carbon (C) in the soil. We used the eddy-covariance technique to measure CO2, water vapor and sensible heat fluxes above a three-year-old HP plantation on high productivity land near St Albert, Alberta. Measurements showed that the annual C balance of the plantation shifted from a C source of about 1.54 Mg C ha(-1) y(-1) in the 2nd year (2010) to a C sink of 0.80 Mg C ha(-1) y(-1) in the 3rd year (2011). Water use or evapotranspiration (E) for 1 June - 31 October increased from 272 mm in 2010 to 321 mm in 2011, and exceeded the respective values of total precipitation of 251 mm and 298 mm for the same period. Annual E in 2010 of 364 mm was less than annual precipitation of 398 mm. In 2011, annual E (442 mm) exceeded annual P (411 mm) by 31 mm; it also exceeded the annual plantation water use E-wb, estimated using a water balance method assuming no drainage from the root zone, by 40 mm. However, both courses of cumulative E and Ewb closely followed cumulative P. Monthly E increased with increasing net radiation and gross primary productivity. Growing season mean albedo increased from 0.16 in 2010 to 0.21 in 2011 and was consistent with the increase in broadband NDVI. Values of albedo during winter months (November April) exceeded 0.80. The results suggested that as the plantation grows, growing season albedo, annual C sequestration, and annual water use will increase with the possibility that the latter may exceed annual precipitation. This emphasizes the need to study the long-term sustainability of HP plantations in relation to annual P and its temporal distribution, especially when HP plantations will likely be established on large contiguous areas to supply biomass feedstock for the expanding pulp and bioenergy industries in Western Canada. (C) 2013 Elsevier Ltd. All rights reserved.