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Abstract In tropical forests, both vegetation characteristics and soil properties are important not only for controlling energy, water, and gas exchanges directly but also determining the competition among species, successional dynamics, forest structure and composition. However, the joint effects of the two factors have received limited attention in Earth system model development. Here we use a vegetation demographic model, the Functionally Assembled Terrestrial Ecosystem Simulator (FATES) implemented in the Energy Exascale Earth System Model (E3SM) Land Model (ELM), ELM‐FATES, to explore how plant traits and soil properties affect tropical forest growth and composition concurrently. A large ensemble of simulations with perturbed vegetation and soil hydrological parameters is conducted at the Barro Colorado Island, Panama. The simulations are compared against observed carbon, energy, and water fluxes. We find that soil hydrological parameters, particularly the scaling exponent of the soil retention curve (B_sw), play crucial roles in controlling forest diversity, with higherB_swvalues (>7) favoring late successional species in competition, and lowerB_swvalues (1 ∼ 7) promoting the coexistence of early and late successional plants. Considering the additional impact of soil properties resolves a systematic bias of FATES in simulating sensible/latent heat partitioning with repercussion on water budget and plant coexistence. A greater fraction of deeper tree roots can help maintain the dry‐season soil moisture and plant gas exchange. As soil properties are as important as vegetation parameters in predicting tropical forest dynamics, more efforts are needed to improve parameterizations of soil functions and belowground processes and their interactions with aboveground vegetation dynamics. 

Summary Deep‐water access is arguably the most effective, but under‐studied, mechanism that plants employ to survive during drought. Vulnerability to embolism and hydraulic safety margins can predict mortality risk at given levels of dehydration, but deep‐water access may delay plant dehydration. Here, we tested the role of deep‐water access in enabling survival within a diverse tropical forest community in Panama using a novel data‐model approach.We inversely estimated the effective rooting depth (ERD, as the average depth of water extraction), for 29 canopy species by linking diameter growth dynamics (1990–2015) to vapor pressure deficit, water potentials in the whole‐soil column, and leaf hydraulic vulnerability curves. We validated ERD estimates against existing isotopic data of potential water‐access depths.Across species, deeper ERD was associated with higher maximum stem hydraulic conductivity, greater vulnerability to xylem embolism, narrower safety margins, and lower mortality rates during extreme droughts over 35 years (1981–2015) among evergreen species. Species exposure to water stress declined with deeper ERD indicating that trees compensate for water stress‐related mortality risk through deep‐water access.The role of deep‐water access in mitigating mortality of hydraulically‐vulnerable trees has important implications for our predictive understanding of forest dynamics under current and future climates.