AbstractA modified Liu analytical model of rainfall interception (Ic) by tree canopies was evaluated using rainfall, throughfall and stemflow data collected from forest restoration trials in the Republic of Panama. The model uses an introduced approach to estimating the water storage capacities of tree boles, which has a more realistic physical basis than earlier iterations of the Liu model. Study species (Acacia mangium, Gliricidia sepium, Guazuma ulmifolia, Ochroma pyramidale, and Pachira quinata) were selected on the basis of differing leaf size and crown characteristics. Significant interspecific differences in both observed and simulated cumulative interception loss were found, with A. mangium intercepting more rainfall than other species. Errors between calculated and modelled cumulative Ic ranged from + 6·3% to + 30·5%, with modelled Ic always being the larger term. During‐event evaporation rates from the study trees were positively related to tree height, crown area, and basal diameter. Crown area and the storage capacity of tree boles were negatively correlated. The results of a sensitivity analysis suggested that the modified model was most sensitive to variations in during‐event evaporation rate. The implications of the model's sensitivity to during‐event evaporation and the importance of this mechanism of interception loss are discussed, while suggestions are provided that may lead to further improvements to the analytical model. Copyright © 2010 John Wiley & Sons, Ltd.