Relationships between tree size and physiological processes such as transpiration may have important implications for plant and ecosystem function, but as yet are poorly understood. We used a process-based model of the soil–plant–atmosphere continuum to investigate patterns of whole-tree sap flow in ponderosa pine trees of different size and age (36 m and ∼250 years versus 13 m and 10–50 years) over a developing summer drought. We examined three different hypothetical controls on hydraulic resistance, and found that size-related differences in sap flow could be best explained by absolute differences in plant resistance related to path length (hypothesis 1) rather than through different dynamic relationships between plant resistance and leaf water potential (hypothesis 2), or alterations in rates of cumulative inducement and repair of cavitation (hypothesis 3). Reductions in sap flow over time could be best explained by rising soil–root resistance (hypothesis 1), rather than by a combination of rising plant and soil–root resistance (hypothesis 2), or by rising plant resistance alone (hypothesis 3). Comparing hourly predictions with observed sap flow, we found that a direct relationship between plant resistance and leaf water potential (hypothesis 2) led to unrealistic bimodal patterns of sap flow within a day. Explaining seasonal reduction in sap flow purely through rising plant resistance (hypothesis 3) was effective but failed to explain the observed decline in pre-dawn leaf water potential for small trees. Thus, hypothesis 1 was best corroborated. A sensitivity analysis revealed a significant difference in the response to drought-relieving rains; precipitation induced a strong recovery in sap flow in the hypothetical case of limiting soil–root resistance (hypothesis 1), and an insignificant response in the case of limiting plant resistance (hypothesis 3). Longer term monitoring and manipulation experiments are thus likely to resolve the uncertainties in hydraulic constraints on plant function.