Impervious surfaces can adversely alter the soil conditions encountered by tree roots in urban environments. However, these conditions may be rendered more suitable for tree growth by the use of permeable surfaces. This study assessed whether permeable pavements with varying depths (0, 100 or 300 mm) of underlying base layer affected the ecophysiological status of broad-leaf paperbark (Melaleuca quinquenervia) trees planted in sandy or clay soils. This study measured instantaneous leaf gas exchange, including photosynthesis (A1400), CO2 concentration at the carboxylation site (Ci), stomatal conductance (gs) and intrinsic water use efficiency (iWUE), and assessed soil and leaf total nitrogen (TN) concentrations. This study also determined longer-term nitrogen cycling and water use efficiency by measuring nitrogen and carbon isotope compositions (δ15N and δ13C) of the soil and leaves. Each of these variables was then related to tree growth over the 18 months of the study. The study found that the different permeable pavement treatments often did not affect A1400, Ci, gs or iWUE, and no significant correlation was found between these four variables and tree growth during the initial tree establishment phase when growth was slow. However, tree height and DBH growth during this phase did correlate with leaf δ15N in both soil types, suggesting that rapid nitrogen cycling was beneficial for initial growth. In contrast, trunk-diameter growth increments during the subsequent period of rapid growth were positively correlated with A1400, Ci and gs, and negatively correlated with leaf δ13C, for trees in clay soil. Trees in clay soil were prone to waterlogging. However, installation of a base layer below the permeable pavement surface was found to reduce waterlogging, decrease leaf δ13C and increase tree growth. These results demonstrate that inclusion of a base layer is important for promoting tree growth when permeable pavements are installed over poorly-draining soils such as clay.