The nitrogen isotopic composition (¹⁵N/¹⁴N) of forested ecosystems varies systematically worldwide. In tropical forests, which are elevated in ¹⁵N relative to temperate biomes, a decrease in ecosystem ¹⁵N/¹⁴N with increasing rainfall has been reported. This trend is seen in a set of well characterized Hawaiian rainforests, across which we have measured the ¹⁵N/¹⁴N of inputs and hydrologic losses. We report that the two most widely purported mechanisms, an isotopic shift in N inputs or isotopic discrimination by leaching, fail to explain this climate-dependent trend in ¹⁵N/¹⁴N. Rather, isotopic discrimination by microbial denitrification appears to be the major determinant of N isotopic variations across differences in rainfall. In the driest climates, the ¹⁵N/¹⁴N of total dissolved outputs is higher than that of inputs, which can only be explained by a ¹⁴N-rich gas loss. In contrast, in the wettest climates, denitrification completely consumes nitrate in local soil environments, thus preventing the expression of its isotope effect at the ecosystem scale. Under these conditions, the ¹⁵N/¹⁴N of bulk soils and stream outputs decrease to converge on the low ¹⁵N/¹⁴N of N inputs. N isotope budgets that account for such local isotopic underexpression suggest that denitrification is responsible for a large fraction (24–53%) of total ecosystem N loss across the sampled range in rainfall.