Plant species distribution is dominated by abundance and fluctuations of the available resources. Although diversity patterns along rainfall, latitudinal, and altitudinal gradients have been thoroughly examined, the role of hydrological processes in sustaining the resource availability critical to species richness is still poorly understood. Adopting soil moisture as a main limiting factor driving plant diversity in the tropics besides elevation, we propose a minimalist species richness model based on stochastic soil water balance and information theory. This work provides a novel approach to plant diversity modeling through a quantitative representation of the soil water balance, demonstrating the role of different modes of soil moisture temporal variability in the creation of ecohydrological niches. Using a single calibration parameter, the model captures the observed biodiversity patterns in tropical South America, effectively synthesizing the impacts of energy and water balances on species richness. We show that soil water abundance and variability are the strongest predictors of plant diversity in tropical South America besides elevation, with latitude and seasonal variation in potential evapotranspiration having a secondary effect. Excluding soil moisture abundance, seasonal and intraseasonal variability reduces model accuracy by 50, 48, and 64%. The importance of atmospheric humidity as an additional plant water resource creating niches for canopy species is also highlighted. Our results suggest that accounting not only for water abundance but also its variability is key to predicting biodiversity trends under future rainfall regimes.