Rise of atmospheric CO2 is one of the main causes of global warming. Catastrophic climate change can be avoided by reducing emissions and increasing sequestration of CO2. Trees are known to sequester CO2 during photosynthesis, and then store it as wood biomass. Thus, breeding of trees with higher wood yield would mitigate global warming as well as augment production of renewable construction materials, energy, and industrial feedstock. Wood is made of cellulose-rich xylem cells produced through proliferation of a specialized stem cell niche called cambium. Importance of cambium in xylem cells production makes it an ideal target for the tree breeding programs; however our knowledge about control of cambium proliferation remains limited. The morphology and regulation of cambium differs from stem cell niches that control axial growth. For this reason, translating the knowledge about axial growth to radial growth has limited use. Furthermore, genetic approaches cannot be easily applied because overlaying tissues conceal cambium from direct observation and complicate identification of mutants. To overcome the paucity of experimental tools in cambium biology, we constructed a Boolean network CARENET (CAmbium Regulation gene NETwork) for modelling cambium activity, which includes the key transcription factors WOX4 and HD-ZIP III as well as their potential regulators. Our simulations revealed that: (1) auxin, cytokinin, gibberellin, and brassinosteroids act cooperatively in promoting transcription of WOX4 and HD-ZIP III; (2) auxin and cytokinin pathways negatively regulate each other; (3) hormonal pathways act redundantly in sustaining cambium activity; (4) individual cells in the stem cell niches can have diverse molecular identities. CARENET can be extended to include components of other signalling pathways and be integrated with models of xylem and phloem differentiation. Such extended models would facilitate breeding trees with higher wood yield.