The Penman-Monteith equation is often used to estimate transpiration, but an important limitation to this approach, especially for mountainous forested sites, is an accurate estimate of canopy conductance averaged over the area of interest (Gs). We propose a method for estimating watershed-scale transpiration using estimates of Gs derived from measurements of stable isotopes. To estimate Gs, we first determined the isotopic composition of ecosystem respiration (δ13CER) as derived from the 12C:13C ratio of respired CO2 entrained within nocturnal cold air drainage flows exiting the base of the watershed. An isotope-derived estimate of recent canopy conductance over the entire watershed (Gs-I) was derived using biophysical models. To estimate daily average transpiration, we applied Gs-I and other measured environmental variables to the Penman-Monteith equation. The results were compared with an independent measure of transpiration using the heat dissipation method at four locations within the watershed. Considering the large number of assumptions required for both estimates of transpiration, the two estimates were remarkably similar. The relationship between the values derived by the two techniques was statistically significant (p value < 0.01), the slope of the line (slope = 1.7) was not statistically different from 1 (p value > 0.1), but the standard error was large (SE = 0.48). The results demonstrate that this technique holds promise, but the effects of potential limitations require further attention. The future research necessary to fully demonstrate the validity of this potentially promising method is discussed.