We report diurnal variations in 18O discrimination (18Δ) during photosynthesis (18ΔA) and respiration (18ΔR) of Picea sitchensis branches measured in branch chambers in the field. These observations were compared with predicted 18Δ (18Δpred) based on concurrent measurements of branch gas exchange to evaluate steady state and non-steady state (NSS) models of foliage water 18O enrichment for predicting the impact of this ecosystem on the δ18O of atmospheric CO2. The non-steady state approach substantially improved the agreement between 18Δpred and observed 18Δ (18Δobs) compared with the assumption of isotopic steady state (ISS) for the δ18O signature of foliage water. In addition, we found direct observational evidence for NSS effects: extremely high apparent 18Δ values at dusk, dawn and during nocturnal respiration. Our experiments also show the importance of bidirectional foliage gas exchange at night (isotopic equilibration in addition to the net flux). Taken together, neglecting these effects leads to an underestimation of daily net canopy isofluxes from this forest by up to 30%. We expect NSS effects to be most pronounced in species with high specific leaf water content such as conifers and when stomata are open at night or when there is high relative humidity, and we suggest modifications to ecosystem and global models of δ18O of CO2.