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The Corymbia and Eucalyptus species eaten by koalas are generally large trees, but these are often unpopular with urban landowners and councils because of the dangers of limbs falling from a great height. We aimed to develop shorter koala food and habitat trees for urban areas by heterografting tall eucalypt species onto rootstocks of shorter species and comparing their survival and growth with homografted trees and control ungrafted trees. In total, 12 of 14 interspecific scion/rootstock combinations were grafted successfully in the nursery but graft compatibility and field survival depended on taxonomic relatedness. The six interspecific combinations that had multiple surviving trees at 5 years after planting were all between species within the same taxonomic section or between a species and its own interspecific hybrid. Almost all trees died from grafts between species in different taxonomic sections. In most cases, the height of surviving interspecific grafted trees did not differ from control intraspecific grafted trees or from ungrafted trees of their scion species. Grafting elicited a ‘thrive or not survive’ response that diminished its usefulness for producing shorter trees. However, one combination, E. moluccana/E. behriana, had field survival of 40% and reduced height (4.0m vs 9.9m). These could be valuable habitat trees for koalas and other fauna in urban areas.