A mechanistically based C3 leaf photosynthesis model combined with an empirical stomatal model and a canopy model of light interception and microclimate was used to simulate Quercus ilex canopy net photosynthesis and transpiration at l'Avic watershed (NE Spain). The model takes into account the sun-shade leaf differentiation of photosynthetic characteristics as affected by depth within the canopy. Based on field studies, simulations were carried out for two locations within the watershed along a gradient in elevation, microclimate and forest structure. Effective predictions of diurnal and seasonal courses of stomatal conductance of sun and shade leaves for different days during the year were obtained by changing a single model variable termed gF. The value of gF determined from least squares of observed vs. simulated time courses was linearly related to pre-dawn xylem water potential over critical ranges of the response curve. Response to gF in the model may to a great extent be thought of as the integrated expression of canopy response to root system generated signals or control mechanisms. For development of predictive capability, gF is extremely useful because it allows seasonal assessments of water use and carbon dioxide uptake with differing patterns in water availability. Based on simulated responses on representative clear, overcast and variable days throughout the year, only small differences in annual totals for net photosynthesis and transpiration were found between the two sites, despite large differences in soil drying. Annual estimates of canopy water loss were in close agreement with independent estimates of evapotranspiration using the hydrological input/output method.