The ecophysiology of tropical montane cloud forest (TMCF) trees is influenced by crown-level microclimate factors including regular mist/fog water inputs, and large variations in evaporative demand, which in turn can significantly impact water balance. We investigated the effect of such microclimatic factors on canopy ecophysiology and branch-level water balance in the dry season of a seasonal TMCF in Veracruz, Mexico, by quantifying both water inputs (via foliar uptake, FU) and outputs (day- and night-time transpiration, NT). Measurements of sap flow, stomatal conductance, leaf water potential and pressure-volume relations were obtained in Quercus lanceifolia, a canopy-dominant tree species. Our results indicate that FU occurred 34% of the time and led to the recovery of 9% (24 ± 9.1 L) of all the dry-season water transpired from individual branches. Capacity for FU was independently verified for seven additional common tree species. NT accounted for approximately 17% (46 L) of dry-season water loss. There was a strong correlation between FU and the duration of leaf wetness events (fog and/or rain), as well as between NT and the night-time vapour pressure deficit. Our results show the clear importance of fog and NT for the canopy water relations of Q. lanceifolia.