Stable isotopes in tree rings could provide palaeoclimate reconstructions with perfect annual resolution and statistically defined confidence limits. Recent advances make the approach viable for non-specialist laboratories. The relevant literature is, however, spread across several disciplines, with common problems approached in different ways. Here we provide the first overview of isotope dendroclimatology, explaining the underlying theory and describing the steps taken in building and interpreting isotope chronologies. Stable carbon isotopes record the balance between stomatal conductance and photosynthetic rate, dominated at dry sites by relative humidity and soil water status and at moist sites by summer irradiance and temperature. Stable oxygen and hydrogen isotopic ratios record source water, which contains a temperature signal, and leaf transpiration, controlled dominantly by vapour pressure deficit. Variable exchange with xylem (source) water during wood synthesis determines the relative strength of the source water and leaf enrichment signals. Producing long Holocene chronologies will require a change in emphasis towards processing very large numbers of samples efficiently, whilst retaining analytical precision. A variety of sample preparation and data treatment protocols have been used, some of which have a deleterious effect on the palaeoclimate signal. These are reviewed and suggestions made for a more standardised approach.