Improving the representation of plant hydraulic behavior in vegetation and land-surface models is critical for improving our predictions of the impacts of drought stress on ecosystem carbon and water fluxes. Species-specific hydraulic traits play an important role in determining the response of ecosystem carbon and water fluxes to water stress. Here, we present plans for the development of the Finite-difference Ecosystem-scale Tree Crown Hydrodynamics model version 3 (FETCH3), a tree hydrodynamic model which builds upon its predecessors FETCH and FETCH2. FETCH3 simulates water transport through the soil, roots, and xylem as flow through porous media. The model resolves water potentials along the vertical dimension, and stomatal response is linked to xylem water potential. The tree-level model is scaled to the plot scale based on the species composition and canopy structure of the plot, allowing the model to be validated using both tree-level observations (sap flux) and plot-level observations (eddy covariance). We will collect data from multiple sites that have both sap flux and eddy covariance measurements for analysis. The Predictive Ecosystem Analyzer (PEcAn) will be used for optimization of the hydraulic parameters in FETCH3 for different plant types in multiple sites. We plan to use this new modeling framework to examine the interactions among water stress, species-specific hydraulic strategies, and stomatal regulation across different species and ecosystem types.