Soil water and temperature regimes in the tropical moist forest on Barro Colorado Island, Panama, were simulated directly from meteorological data using the model SWEAT. Separate field observations from root-exclusion, litter-removal and control treatments in one small and one large forest gap were used for calibration and validation. After irrigating all treatments to field capacity, soil matric potential and temperature were measured over 17 days at four depths ≤50 mm using the filter-paper technique and bead thermistors. Understorey environments were also simulated under the same initial conditions. The results suggest that three distinct scenarios, controlled by gap size, describe how the above- and below-ground processes controlling soil drying are coupled: (1) in the large gap, root water extraction by surrounding trees is negligible so soil drying is dominated by evaporation from the soil surface. Soil temperature is dominated by direct solar heating and cooling due to evaporation. (2) In the small gap, root water extraction dominates soil drying with soil evaporation playing a minor role. Soil temperature is still dominated by direct sunlight with some cooling due to evaporation. (3) In the understorey, root water extraction dominates soil drying. Soil temperature is dominated by heat conduction from deep soil layers with some evaporation and sensible heat transfer. The contrasting soil drying regimes imposed by variation in canopy structure enhance micro-environmental heterogeneity and the scope for differential germination and seedling establishment in coexisting tropical tree species.