Despite the widely held assumption that trees negatively affect the local water budget in densely planted tree plantations, we still lack a clear understanding of the underlying processes by which canopy cover influences local soil water dynamics in more open, humid tropical ecosystems. In this study, we propose a new conceptual model that uses a combination of stable isotope and soil moisture measurements throughout the soil profile to assess potential mechanisms by which evaporation (of surface soil water and of canopy-intercepted rainfall) affects the relationship between surface soil water isotopic enrichment (lc-excess) and soil water content. Our conceptual model was derived from soil water data collected under deciduous and evergreen plants in a shade grown coffee agroforestry system in Costa Rica. Reduced soil moisture under shade trees during the “drier” season, coinciding when these trees were defoliated, was largely the result of increase soil water evaporation as indicated by the positive relationship between soil water content and lc-excess of surface soil water. In contrast, the evergreen coffee shrubs had a higher leaf area index during the “drier” season, leading to enhanced rainfall interception and a negative relationship between lc-excess and soil water content. During the wet season, there was no clear relationship between soil water content and between lc-excess of surface soil water. Greater surface soil water under coffee during the dry season may, in part, explain greater preferential flow under coffee compared with under trees in conditions of low rainfall intensities. However, with increasing rainfall intensities during the wet season, there was no obvious difference in preferential flow between the two canopy covers. Results from this study indicate that our new conceptual model can be used to help disentangling the relative influence of canopy cover on local soil water isotopic composition and dynamics, yet also stresses the need for addi