The forest–atmosphere exchange of carbon and water is regulated by meteorological conditions as well as canopy properties such as leaf area index (LAI, m2 m−2), photosynthetic capacity (PC μmol m−2 s−1), or surface conductance in optimal conditions (Gs,opt, mmol m−2 s−1), which can vary seasonally and inter-annually. This variability is well understood for deciduous species but is poorly characterized in evergreen forests. Here, we quantify the seasonal dynamics of a temperate evergreen eucalypt forest with estimates of LAI, litterfall, carbon and water fluxes, and meteorological conditions from measurements and model simulations. We merged MODIS Enhanced Vegetation Index (EVI) values with site-based LAI measurements to establish a 17-year sequence of monthly LAI. We ran the Community Atmosphere Biosphere Land Exchange model (CABLE-POP (version r5046)) with constant and varying LAI for our site to quantify the influence of seasonal canopy dynamics on carbon and water fluxes. We observed that the peak of LAI occurred in late summer–early autumn, with a higher and earlier peak occurring in years when summer rainfall was greater. Seasonality in litterfall and allocation of net primary productivity (FNPP) to leaf growth (af, 0–1) drove this pattern, suggesting a complete renewal of the canopy before the timing of peak LAI. Litterfall peaked in spring, followed by a high af in summer, at the end of which LAI peaked, and PC and Gs,opt reached their maximum values in autumn, resulting from a combination of high LAI and efficient mature leaves. These canopy dynamics helped explain observations of maximum gross ecosystem production (FGEP) in spring and autumn and net ecosystem carbon loss in summer at our site. Inter-annual variability in LAI was positively correlated with Net Ecosystem Production (FNEP). It would be valuable to apply a similar approach to other temperate evergreen forests to identify broad patterns of seasonality in leaf growth and turnover. Because incorporating dynamic LAI was insufficient to fully capture the dynamics of FGEP, observations of seasonal variation in photosynthetic capacity, such as from solar-induced fluorescence, should be incorporated in land surface models to improve ecosystem flux estimates in evergreen forests.