We define the beta diffusion tree, a random tree structure with a set of leaves that defines a collection of overlapping subsets of objects, known as a feature allocation. A generative process for the tree structure is defined in terms of particles (representing the objects) diffusing in some continuous space, analogously to the Dirichlet diffusion tree (Neal, 2003), which defines a tree structure over partitions (i.e., non-overlapping subsets) of the objects. Unlike in the Dirichlet diffusion tree, multiple copies of a particle may exist and diffuse along multiple branches in the beta diffusion tree, and an object may therefore belong to multiple subsets of particles. We demonstrate how to build a hierarchically-clustered factor analysis model with the beta diffusion tree and how to perform inference over the random tree structures with a Markov chain Monte Carlo algorithm. We conclude with several numerical experiments on missing data problems with data sets of gene expression microarrays, international development statistics, and intranational socioeconomic measurements.