The oxygen isotope of water (18O-H2O) and carbon dioxide (18O-CO2) is an important signal of global change and can provide constraints on the coupled carbon-water cycle. Here, simultaneous observations of 18O-H2O (liquid and vapor phases) and 18O-CO2 were used to investigate the relation between canopy leaf water 18O enrichment, 18O-CO2 photosynthetic discrimination (18Δ), isotope disequilibrium (Deq), and the biophysical factors that control their temporal variability in a C4 (Zea mays L.) ecosystem. Data and analyses are presented from a 74 day experiment conducted in Minnesota during summer 2009. Eddy covariance observations indicate that the oxygen isotope composition of C4 evapotranspiration (δE) ranged from about −20‰ (VSMOW scale) in the early morning to −5‰ after midday. These values were used to estimate the isotope composition at the sites of leaf water evaporation (δL,e) assuming non-steady-state conditions and revealed a strong diurnal pattern ranging from about −5‰ in the early morning to +10‰ after midday. With the addition of net ecosystem CO2 exchange measurements and carbonic anhydrase (CA) assays, we derived canopy-scale 18Δ. These estimates typically varied from 11.3 to 27.5‰ (VPDB scale) and were shown to vary significantly depending on the steady state or non-steady-state assumptions related to leaf water enrichment. We demonstrate that the impact of turbulence on kinetic fractionation and steady state assumptions result in larger estimates of 18Δ and Deq. Further, the results indicate that both leaf-scale and canopy-scale CO2 hydration efficiency may be substantially lower than that previously reported for laboratory conditions. These results may have important implications for interpreting variations in atmospheric 18O-CO2 and constraining regional carbon budgets based on the oxygen isotope tracer approach.