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Tropical montane cloud forests (TMCFs) are ecosystems with high biodiversity that are threatened by deforestation, land use changes, and climate change. One of the unique aspects of TMCFs is the high biomass and diversity of epiphytes. Epiphytes are vascular and non-vascular plants that live in tree canopies, creating arboreal micro-ecosystems. They provide ecological services by capturing and retaining allochthonous nutrients from rain and fog, and by supporting the presence of canopy pollinators and other fauna. Predicted changes in cloudiness and land conversion threaten the abundance of epiphytes, and thus their capacity to contribute to ecosystem functions. However, how losses in epiphyte abundance will affect microclimate and host tree water status is still unclear and requires the ability to simulate the role of epiphytes in canopy water storage dynamics. We developed a water balance model for epiphytes in TMCFs. We consider epiphytes in the host tree as a water store inside the canopy that is filled via precipitation from both rain and fog, and depleted via evapotranspiration and host tree water uptake. The model was used to simulate water and energy fluxes between the epiphytes and their surroundings under idealized and real dry season conditions for TMCFs near Monteverde, Costa Rica. Results from the idealized and real simulations capture how epiphytes retain water under dry-down conditions, leading to small diurnal variability in temperature, low evapotranspiration rates, and enhanced dew deposition at night. We find that dew deposition recharges up to 34 % of epiphyte water storage lost due to evapotranspiration over a 3-day dry-down event. Our results provide the first quantitative demonstration of the importance of epiphyte water storage on temperature and dew formation in TMCFs. This work sets the foundation for developing a process-based understanding of the effects of epiphyte loss on TMCF ecohydrology.