In the past, arborists would patch holes in trees with concrete or cement. The thought was the cement would make the tree stronger. In reality, it weakened the tree as the cement was unable to flex with it. Every time the wind blew, the cement would press against the tree. Now the best method of treatment is debated. Filling the hole will not help the tree, but it may help prevent mosquitoes and other pests that can create homes in these cavities.
Bring in an arborist to inspect the tree if the hole is large or in a portion of the trunk to ensure the tree is sound. If it is not, the tree will should to be removed for safety reasons or additional support should be provided.
Improve the tree's vigor by fertilizing moderately, irrigating during dry spells and mulching around the base of the tree to eliminate grass and weeds that compete for nutrients. This will help the tree heal itself. Use natural mulch such as wood bark or straw.
Consult with an arborist about inserting a tube if the hole is far up on the tree and fills with water. These holes can become havens for mosquitoes and cannot be drained or treated like lower cavities. However, inserting tubes requires you to bore holes, which breaches healthy tissue and can do further damage to the tree.
Drain cavities or treat them with a wildlife-safe mosquito larvicide if they fill with water.
Fill the hole with expandable insulating foam if necessary to keep out water or undesirable animals or insects. Cover the foam with a layer of Bondo or automobile body filler followed by a layer of spray paint to protect it from the elements. Make sure the hole is dry before filling it with foam but do not try to clean out the wound.