Evapotranspiration (ET) from the land surface to the atmosphere is a major component of Earth’s water cycle, and comprises both transpiration (T) of xylem water from plants and evaporation (E) of water from soils and vegetation surfaces. These two component fluxes respond differently to changes in temperature, water availability and atmospheric CO2 concentrations. Concurrent eddy covariance (EC) measurements above and below forest canopies provide a promising approach to partition ET into E and T. However, below-canopy EC measurements are rare, and questions remain regarding their spatial variability, canopy coupling, and temporal dynamics. To address these challenges, we measured and partitioned ET over more than three years, using concurrent above- and below-canopy EC towers in a montane forest at Sagehen Creek in California’s Sierra Nevada mountains. This is the establishing study for the AmeriFlux site US-SHC. The main environmental control for ET was available energy; other important controls were canopy & soil temperature, soil moisture, vapor pressure deficit, and wind speed. Below-canopy measurements at two locations within the above-canopy footprint were similar to one another, suggesting low spatial heterogeneity in understory ET near the creek at our Sagehen site. We observed a total forest ET of 606 ± 50 mm yr−1 with 275 ± 17 mm yr−1 measured in the understory (all mean ± SD) during the water years 2018–2020. Interannual variability in ET and T was small despite large variability in precipitation totals; thus the P–ET water balance was mainly driven by variations in water supply. Partitioning the components of total forest ET at Sagehen with concurrent EC measurements showed that on average, 67–74% of ET originated from T (47% from trees and 20–27% from understory vegetation), while 26–33% were from E (mostly from the understory). Our results demonstrate the potential of concurrent above- and below-canopy EC measurements for ET partitioning.