Abstract
<title>Abstract</title> <p> Vertical canopy stratification generates strong microenvironmental gradients that shape plant physiological performance and resource-use strategies. Yet, the mechanistic pathways linking canopy structure, microenvironment, and trait-mediated responses remain poorly understood. In this study, we investigated how direct and indirect effects of vertical environmental heterogeneity, vegetation structure, and functional leaf traits regulates instantaneous water-use efficiency (WUE <sub>inst</sub> ), CO <sub>2</sub> assimilation rate ( <italic>A</italic> ) and transpiration rate (E) across four canopy strata in cacao agroforestry systems in Bolivia. A total of 546 leaves from 24 tree species were measured under experimental field conditions using wireless infrared gas exchange sensors. Leaf structural [Leaf area (LA), Specific leaf area (SLA)] and functional traits [Relative water content (RWC), Stomata density (SD)] were also quantified. We applied structural equation modelling to disentangle the mechanistic pathways regulating plant physiological responses across vertical strata. Our results reveal clear functional niche differentiation along the vertical canopy gradient. Upper-strata trees exhibited a resource-acquisitive strategy, characterized by increased CO <sub>2</sub> assimilation that outpaced transpiration resulting in a high WUE <sub>inst</sub> under high photosynthetically active radiation (PAR). In contrast, lower-strata trees are immersed in buffered microenvironmental conditions, with stable humidity and temperature. Under low PAR, these trees displayed a resource-conservative strategy, with reduced <italic>A</italic> and E and relatively constant WUEinst. While LA and RWC increased with canopy height, SLA and SD remained stable, indicating functional convergence of leaf traits supporting carbon gain and light tolerance in the upper strata. Overall, our findings demonstrate that canopy stratification drives contrasting water-carbon use strategies through, coordinated, trait-mediated responses to environmental gradients. </p>