In the tropical forest of Barro Colorado Island, habitat characteristics, diel acidity changes, CO2 uptake and growth were investigated for the epiphytic cactus Epiphyllum phyllanthus (L.) Haw. It occurred most frequently in tree cavities with its roots in canopy soil and was especially abundant on two tree species: Platypodium elegans J. Vogel and Tabebuia guayacan (Seem.) Hemsl. Its maximum net CO2 uptake rates were low under natural conditions (1.4 μmol m−1) but were comparable to those of other CAM and C3 epiphytes under wet conditions in a screenhouse. Under both natural conditions and in the screenhouse, partial shade enhanced growth and CAM activity. When plants grew under a photosynthetic photon flux of c. 4 mol m−2 d−1, their nocturnal acidity increase and total net CO2 uptake were twice as much as for plants growing at lower (an average of 2.4 mol m−2 d−1) and higher (7.7 mol m−2 d−1) photosynthetic photon fluxes. Stem elongation was 27% greater at the intermediate photosynthetic photon flux. Seedlings of E. phyllanthus survived three months of drought and responded rapidly to rewetting, recovering fully within three days. Transpiration rates and nocturnal acidity increases also recovered to the values of well-watered plants a few days after rewetting, indicating that this species can take advantage of episodic rainfall during the dry season.