The Great Deru Tree grows atop the large cataracts overlooking the Chapel on Xi Ru's Island. To get to the tree, run west from the drop then north along the beach until you get to the Moarsmen Encampment at 60.1S 88.1W. From there, head south up the mountain all the way up to the Great Deru Tree at 89.8S 87.4E. The King's Crown water lily grows at the base of the tree.
In The Beast With Many Heads, a dungeon was added that goes underneath the tree, Roots of the Deru Tree.