Sap flux density (FLA) in branches of Betula pendula trees was examined with respect to environmental variables and canopy position. FLA of branches sampled within the basal and top thirds of crowns was analysed with respect to stomatal (gs), canopy (gc) and soil-to-leaf hydraulic conductance (KT). The canopy positions differed significantly (P < 0·001) by FLA: the day-time values in the upper canopy were on average 1·8 times greater than in the lower canopy (59·2 vs 33·2 g m−2 h−1), associated with greater gs, gc and KT observed in the upper canopy. The differences in gc among the canopy positions resulted primarily from a ∼10-fold greater aerodynamic boundary-layer conductance (gbl) in the upper canopy (mean gbl was 1695 vs 161 mmol m−2 s−1, respectively) in the day time. The asymptotic nature of gs versus gc relationship observed in the lower canopy suggests that stomata limit transpiration from the shade foliage at higher gbl. The linear relationship (R2 = 0·49–0·58, P < 0·001) between KT and FLA alludes to the role of hydraulic capacity in the control of sap fluxes. The dominant environmental factor affecting FLA in the day time was irradiance, and air relative humidity at night. The strong dependence of FLA on atmospheric evaporative demand in the night time proved that nocturnal branch sap flow indeed represents transpiration, but not tissue water recharge. Nocturnal FLA was about 24·7 and 19·5% of the respective mean day-time rates for the upper and lower canopy. Owing to short northern nights in summer, nocturnal transpiration constituted only 6–8% of the daily total water loss. The variation in branch-level sap flow is determined not merely by environmental gradients existing within the forest canopy, but depends largely on trees' internal properties, including stomatal conductance and plant hydraulic properties. Copyright © 2010 John Wiley & Sons, Ltd.