The hydrological model TOPMODEL is used to assess the water balance and describe flow paths for the 9·73 ha Lutz Creek Catchment in Central Panama. Monte Carlo results are evaluated based on their fit to the observed hydrograph, catchment-averaged soil moisture and stream chemistry. TOPMODEL, with a direct-flow mechanism that is intended to route water through rapid shallow-soil flow, matched observed chemistry and discharge better than the basic version of TOPMODEL and provided a reasonable fit to observed soil moisture and wet-season discharge at both 15-min and daily time-steps. The improvement of simulations with the implementation of a direct-flow component indicates that a storm flow path not represented in the original version of TOPMODEL plays a primary role in the response of Lutz Creek Catchment. This flow path may be consistent with the active and abundant pipeflow that is observed or delayed saturation overland flow. The ‘best-accepted’ simulations from 1991 to 1997 indicate that around 41% of precipitation becomes direct flow and around 10% is saturation overland flow. Other field observations are needed to constrain evaporative and groundwater losses in the model and to characterize chemical end-members posited in this paper. Published in 2004 by John Wiley & Sons, Ltd.