Little is known about water transfer via mycorrhizal hyphae to plants, despite its potential importance in seedling establishment and plant community development, especially in arid environments. Therefore, this process was investigated in the study reported in this paper in laboratory-based tripartite mesocosms containing the shrub Arctostaphylos viscida (manzanita) and young seedlings of sugar pine (Pinus lambertiana) and Douglas-fir (Pseudotsuga menziesii). The objectives were to determine whether water could be transported through mycorrhizal symbionts shared by establishing conifers and A. viscida and to compare the results obtained using two tracers: the stable isotope deuterium and the dye lucifer yellow carbohydrazide. Water containing the tracers was added to the central compartment containing single manzanita shrubs. The fungal hyphae were then collected as well as plant roots from coniferous seedlings in the other two compartments to determine whether water was transferred via fungal hyphae. In addition, the length of the hyphae and degree of mycorrhizal colonisation were determined. Internal transcribed spacer-restriction fragment length polymorphism (ITS-RFLP) analysis was used to identify the fungal species involved in dye (water) transfer. Results of the stable isotope analysis showed that water is transferred via mycorrhizal hyphae, but isotopically labelled water was only detected in Douglas-fir roots, not in sugar pine roots. In contrast, the fluorescent dye was transported via mycorrhizal hyphae to both Douglas-fir and sugar pine seedlings. Only 1 of 15 fungal morphotypes (identified as Atheliaceae) growing in the mesocosms transferred the dye. Differences were detected in the water transfer patterns indicated by the deuterium and fluorescent dye tracers, suggesting that the two labels are transported by different mechanisms in the same hyphae and/or that different fungal taxa transfer them via different routes to host plants. We conclude that both tracers can provide information on resource transfer between fungi and plants, but we cannot be sure that the dye transfer data provide accurate indications of water transfer rates and patterns. The isotopic tracer provides more direct indications of water movement and is therefore more suitable than the dye for studying water relations of plants and their associated mycorrhizal fungi.