Rainfall interception by trees and slash was measured for 1 year in a 9 m tall, 7-year-old Pinus radiata D. Don stand, thinned to 450 trees ha −1 and pruned to heights up to 5 m. Tree leaf and slash surface area indices, on a one-sided area basis, were 1.7 and 3.5, respectively. Slash surface area was principally (about 90%) comprised of leaves. A total of 1154 mm of rain was recorded on 163 days during 336 events. Median event size and rainfall intensity were 0.8 mm and 0.4 mm h −1, respectively. The measured fraction of rainfall intercepted by the tree canopy was 0.19. Stemflow was linearly related to rainfall, with maximum values (for rainfall of 91.4 mm) of 6.3 and 7.6 mm for trees that had been pruned to heights of 2–3 m and 3–5 m, respectively. Slash covered 60% of the ground, with interception being 11% of rainfall on a stand basis. Wetness sensors, located within the base of the tree canopy, were wet for 26% of the time. The fraction of wetness duration during darkness nearly coincided with the time fraction of dark hours. This result and the equal probability of rainfall throughout the day showed the importance of night-time interception and evaporation. Estimates of stand aerodynamic conductance for water vapour transfer, derived from six night-time canopy drying events, were proportional to wind speed and varied from 0.05 to 0.33 m s −1 (corresponding wind speeds were 1.2 ms −1 and 6.0 ms −1, respectively). During these events, there was no radiative energy so that evaporation was driven by convective energy, with vapour pressure deficit being typically 0.1 kPa. The effect of rainfall interception on the forest water balance was examined using a biophysical water balance model with parameters derived from the stand measurements. Although there was generally satisfactory agreement between modelled and independently measured two-weekly soil water storage over the year, annual evaporation of rainfall intercepted by the tree canopy modelled with the Penman equation was only 9% of rainfall (100 mm). This is attributed largely to an underestimation of wet tree canopy evaporation -during 15 days of higher-intensity rain when daily falls exceeded 20 mm. For the remaining 148 rain days, modelled wet tree canopy evaporation was generally close to the measured 19% of rainfall. Modelled annual wet canopy evaporation emanating from the slash was 116 mm (10% of rainfall). Modelled annual tree transpiration and understorey evaporation during fine periods were 367 and 328 mm. respectively. Annual soil drainage/water yield was 270 mm. Implications for the management of water yield from forested catchments are discussed.