Relations between the spatial patterns of soil moisture, soil depth, and transpiration and their influence on the hillslope water balance are not well understood. When determining a water balance for a hillslope, small scale variations in soil depth are often ignored. In this study we found that these variations in soil depth can lead to distinct patterns in transpiration rates across a hillslope. We measured soil moisture content at 0.05 and 0.10 m depth intervals between the soil surface and the soil–bedrock boundary on 64 locations across the trenched hillslope in the Panola Mountain Research Watershed, Georgia, USA. We related these soil moisture data to transpiration rates measured in 14 trees across the hillslope using 28 constant heat sapflow sensors. Results showed a lack of spatial structure in soil moisture across the hillslope and with depth when the hillslope was in either the wet or the dry state. However, during the short transition period between the wet and dry state, soil moisture did become spatially organized with depth and across the hillslope. Variations in soil depth and thus total soil water stored in the soil profile at the end of the wet season caused differences in soil moisture content and transpiration rates between upslope and midslope sections at the end of the summer. In the upslope section, which has shallower soils, transpiration became limited by soil moisture while in the midslope section with deeper soils, transpiration was not limited by soil moisture. These spatial differences in soil depth, total water available at the end of the wet season and soil moisture content during the summer appear responsible for the observed spatial differences in basal area and species distribution between the upslope and midslope sections of the hillslope.