The use of tree rings to determine the age of trees was first developed by astronomer Andrew Ellicott Douglass in 1901. Initially looking for tree ring growth as an indicator of solar cycles, believing that solar flares affected climate, and therefore the amount of growth a tree might make in a year. What he ascertained, was that tree ring width does indeed vary with the amount of rainfall in a given year. Therefore, all trees within a certain area will grow at the same rate during wet or dry years. And, each tree will contain a record of rainfall that occurred during its life, and will include density, trace elements, and isotope composition.
Along with anthropologist Clark Wissler, Douglass worked to find a connecting tree ring sequence that would allow for dating pine trees in the American southwest. In 1929, after 12 years of research, they found a charred log near Show Low, Arizona, that enabled them to complete their sequence and assign calendar dates to archaeological sites for over 1000 years.
Nowadays, dendrochronology has been extended in the American southwest to 322 BC, by matching known patterns of dark and light rings to those recorded by Douglass and those who followed his research. There is also dendrochronology records for Europe, the Aegean, and an International Tree Ring Database which includes 21 countries.
Source:http://archaeology.about.com/science/archaeology/library/weekly/aa011198.htm