A levelwind system for a coiled tubing reel (26) including an arcuate guide arm (48) extending over the upper surface of the reel (26). A universal joint (50) mounts the lower end of the arm (48) for pivotal movement both vertically and horizontally. A guide member (52) is supported on the free end of the guide arm (48) for guiding the coiled tubing T on and off reel (26). A lift cylinder (54) is effective to raise and lower guide arm (48). A balancing cylinder (60) is effective for moving guide arm ME (48) laterally. A hydraulic fluid circuit responsive to a position sensor (111) and a microprocessor (112) as shown in FIG. 12 is effective for controlling the movement of the coiled tubing guide arm (48).