Understanding the water requirement of forest species in the seedling stage supports cost reduction by eliminating unnecessary irrigation in addition to providing higher productivity. This study was carried out to evaluate the effect of the water regime on initial growth, leaf production and content and chemical composition of the essential oil of Eucalyptus globulus , during the first 120 days of cultivation. The experiment employed a completely randomized design and was carried out at the Instituto de Ciências Agrárias da Universidade Federal de Minas Gerais (ICA/UFMG), Montes Claros, MG. Treatments consisted of six different water regimes (50%, 75%, 100%, 125%, 150% and 175% of the reference evapotranspiration - ETo) with four replicates. Plant growth was evaluated by measuring linear dimensions - height, stem diameter and number of leaves. The essential oil was extracted from fresh leaves by hydrodistillation in a Clevenger apparatus. The present study demonstrated that irrigation depths corresponding to 75% of the ETo are responsible for increased growth of E. globulus and increased dry matter production of leaves. The lowest irrigation levels were responsible for the greatest essential oil content. The essential oil was analyzed by gas chromatography-mass spectrometry (CG- MS), and eucalyptol (40.84% to 55.72%) was reported to be the major compound for all treatments. Compounds such as β-myrcene, α-Gurgujeno, Alloromadendreno, Varidiflorene appear under specific irrigation conditions.