Plant productivity, distribution and diversity in tropical rain forests correlate with water availability. Water availability is determined by rainfall and also by the available water capacity of the soil. However, while rainfall is recognized as important, linkages between plant distribution and differences among soils in available water capacity have not been demonstrated. One reason for this may be that measurements of soil moisture, such as gravimetric water content, may be overly simplistic. To investigate this, we compared two sites in Panama, Allee and Rio Paja, which have similar rainfall but different plant communities. Soil water release curves were obtained from about −0.1 MPa to −9 MPa, permitting us to calculate available water capacity. The Rio Paja site had 17% greater available water capacity (between −0.1 MPa to −3 MPa), whereas the gravimetric water content at Rio Paja was lower by 16% in rainy season and by 41% at the end of the dry season. Hence soil gravimetric water content and soil available water capacity did not correspond. The results suggest that available water capacity may better predict plant distributions. Hence, whenever possible, available water capacity should be determined in addition to gravimetric water content.