The cambium is a layer of tissue in plants that plays a crucial role in growth. It is located between the xylem, which transports water and nutrients, and the phloem, which carries sugars produced by photosynthesis. The cambium produces new cells, allowing the plant to increase in diameter and support its structure. This layer is particularly important in woody plants, such as trees and shrubs, where it contributes to secondary growth. As the cambium divides, it generates new xylem cells on the inside and new phloem cells on the outside, helping the plant to grow thicker and stronger over time.