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Abstract Epiphytes are characterized by their ability to survive without a root connection to the ground, but many basic life‐history traits and ecological trade‐offs of this unique aerial growth habit remain largely uncharacterized. Mortality causes are still not well understood, but falling from the host tree has been suggested as a leading cause of epiphyte mortality and community dynamics. Little empirical evidence exists forwhyepiphytes do not survive when forced to become terrestrial, and few studies exist that transplant epiphytes between high‐ and low‐forest strata to test trade‐offs between thriving in canopy environments and survival in the forest understorey.Here, we experimentally test two hypotheses regarding the drivers of epiphyte mortality in a cloud forest of central Panama. We test whether simple contact with terrestrial soil is deleterious to epiphytes, preliminarily testing the epiphyte enemy escape hypothesis, and test the vertical niche differentiation hypothesis, wherein epiphytes are specifically adapted for microsites throughout the vertical forest strata. By monitoring survival, leaf loss and health status of 270 transplanted epiphytes for a year and a half, we pinpoint the extent to which soil contact and height of origin regulate epiphyte performance.We found that contact with terrestrial soil itself was detrimental to epiphytes in situ, providing some of the first empirical data to explain why falling onto the ground, versus falling into the understorey, is particularly fatal to epiphytes. However, we also found that mortality rates vary substantially among taxonomic groups and among epiphytes that originally came from different height strata.Synthesis. Plants that are adapted for the canopy experience a trade‐off with higher mortality when in contact with terrestrial soil. Follow‐up studies should explore the role of terrestrial soil microbes and physiological constraints as potential drivers of decreased grounded epiphyte survival.