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In tree species native to temperate and boreal regions, the activity-dormancy cycle is an important adaptive trait both for survival and growth. We discuss recent research on mechanisms controlling the overlapping developmental processes that define the activity-dormancy cycle, including cessation of apical growth, bud development, induction, maintenance and release of dormancy, and bud burst. The cycle involves an extensive reconfiguration of metabolism. Environmental control of the activity-dormancy cycle is based on perception of photoperiodic and temperature signals, reflecting adaptation to prevailing climatic conditions. Several molecular actors for control of growth cessation have been identified, with the CO/FT regulatory network and circadian clock having important coordinating roles in control of growth and dormancy. Other candidate regulators of bud set, dormancy and bud burst have been identified, such as dormancy-associated MADS-box factors, but their exact roles remain to be discovered. Epigenetic mechanisms also appear to factor in control of the activity-dormancy cycle. Despite evidence for gibberellins as negative regulators in growth cessation, and ABA and ethylene in bud formation, understanding of the roles that plant growth regulators play in controlling the activity-dormancy cycle is still very fragmentary. Finally, some of the challenges for further research in bud dormancy are discussed.