A new model of stomatal conductance is proposed which combines the essential features of the Ball–Berry–Leuning (BBL) and Tardieu–Davies (TD) models within a simple spatially aggregated picture of guard cell function. The model thus provides a coherent description of stomatal responses to both air and soil environments. The model also presents some novel features not included in either the BBL or TD models: stomatal sensing of intercellular (rather than leaf surface) CO2 concentration; an explanation of all three observed regimes (A, B and C) of the stomatal response to air humidity (Monteith Plant, Cell and Environment 18, 357–364, 1995); incorporation of xylem embolism; and maintenance of hydraulic homeostasis by combined hydraulic and chemical signalling in leaves (in which leaf epidermal hydraulic conductivity plays a key role). Significantly, maintenance of hydraulic homeostasis in the model does not require a direct feedback signal from xylem embolism, the predicted minimum leaf water potential being independent of xylem hydraulic conductivity. It is suggested that stomatal regulation through combined hydraulic and chemical signalling in leaves and/or roots provides a general mechanism enabling plants to maintain their water potentials above a minimum value. Natural selection of the key stomatal parameters would then set the minimum potential to a specific value determined by the most vulnerable plant process under water stress (e.g. cell growth, protein synthesis or xylem cavitation), depending on species and growth conditions.