A tree grows in trunk diameter by adding a layer of new wood in the cambium layer of the bark every year. Each layer of new wood that is added to a tree forms a recognizable ring. The cambium produces large cells in the spring when water is abundant and growing conditions are generally good but nearly none in dormant winter.
Tree height and branch lengthening depends on elongating cells at the base of buds to create upward and outward crown growth in trees. Top growth is usually associated with a crown-tip bud and apical meristem cells and tree branch growth works in a similar way with buds at the apex of each twig.
More Tree Growth information:
Illustrated Tree Trunk, USFS Illustration