The bundles contain both xylem and phloem , and are marked by the presence of large canals known as carinal canals , which also function in water conduction. External to the vascular bundles is another set of canals, the vallecular canals or cortical canals . These canals line up with the depressions between the ribs on the surface of the stem. Most fossil sphenophytes had a very similar stem morphology. Leaves or roots form circular whorls around each node.
Some species frequently branch at the nodes as well, while in others branching is rare or absent.
The middle branch leaves the stem and forms the midrib of a leaf, while the other two branches join with their neighbors to reform a full-sized vascular bundle. Equisetum leaves are either long and slender, as in the tropical Mexican species pictured at the left, or scalelike. Most fossil sphenophytes had similar small or slender leaves, but the Pennsylvanian genus Sphenophyllum had broad, wedge-shaped leaves. Both living and fossil sphenophytes form underground stems known as rhizomes . Isolated fragments of a rhizome can give rise to new individuals.