Lianas are an important component of tropical forests, contributing up to 25% of the woody stems and 35% of woody species diversity. Lianas invest less in structural support but more in leaves compared to trees of similar biomass. These physiological and morphological differences suggest that lianas may interact with neighboring plants in ways that are different from similarly sized trees. However, the vast majority of past liana competition studies have failed to identify the unique competitive effects of lianas by controlling for the amount of biomass removed. We assessed liana competition in the forest understory over the course of 3 years by removing liana biomass and an equal amount of tree biomass in 40 plots at 10 sites in a secondary tropical moist forest in central Panama. We found that growth of understory trees and lianas, as well as planted seedlings, was limited due to competitive effects from both lianas and trees, though the competitive impacts varied by species, season, and size of neighbors. The removal of trees resulted in greater survival of planted seedlings compared to the removal of lianas, apparently related to a greater release from competition for light. In contrast, lianas had a species-specific negative effect on drought-tolerant Dipteryx oleifera seedlings during the dry season, potentially due to competition for water. We conclude that, at local scales, lianas and trees have unique and differential effects on understory dynamics, with lianas potentially competing more strongly during the dry season, and trees competing more strongly for light.