Diurnal patterns of hydraulic conductance of the leaf lamina (Kleaf) were monitored in a field-grown tropical tree species in an attempt to ascertain whether the dynamics of stomatal conductance (gs) and CO2 uptake (Aleaf) were associated with short-term changes in Kleaf. On days of high evaporative demand mid-day depression of Kleaf to between 40 and 50% of pre-dawn values was followed by a rapid recovery after 1500 h. Leaf water potential during the recovery stage was less than −1 MPa implying a refilling mechanism, or that loss of Kleaf was not linked to cavitation. Laboratory measurement of the response of Kleaf to Ψleaf confirmed that leaves in the field were operating at water potentials within the depressed region of the leaf ‘vulnerability curve’. Diurnal courses of Kleaf and Ψleaf predicted from measured transpiration, xylem water potential and the Kleaf vulnerability function, yielded good agreement with observed trends in both leaf parameters. Close correlation between depression of Kleaf, gs and Aleaf suggests that xylem dysfunction in the leaf may lead to mid-day depression of gas exchange in this species.