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Respiration in tree stems is an important component of forest carbon balance. The rate of CO2 efflux from the stem has often been assumed to be a measure of stem respiration. However, recent work in temperate forests has demonstrated that stem CO2 efflux can either overestimate or underestimate respiration rate because of emission or removal of CO2 by transport in xylem water. Here, we studied gas exchange from stems of tropical forest trees using a new approach to better understand respiration in an ecosystem that plays a key role in the global carbon cycle. Our main questions were (1) is internal CO2 transport important in tropical trees, and, if so, (2) does this transport result in net release of CO2 respired in the roots at the stem, or does it cause the opposite effect of net removal of stem-respired CO2? To answer these questions, we measured the ratio of stem CO2 efflux to O2 influx. This ratio, defined here as apparent respiratory quotient (ARQ), is expected to equal 1.0 if carbohydrates are the substrate for respiration, and the net transport of CO2 in the xylem water is negligible. Using a stem chamber approach to quantifying ARQ, we found values of 0.66 ± 0.18. These low ARQ values indicate that a large portion of respired CO2 (~ 35%) is not emitted locally, and is probably transported upward in the stem. ARQ values of 0.21 ± 0.10 were found for the steady-state gas concentration within the stem, sampled by in-stem equilibration probes. These lower values may result from the proximity to the xylem water stream. In contrast, we found ARQ values of 1.00 ± 0.13 for soil respiration. Our results indicate the existence of a considerable internal flux of CO2 in the stems of tropical trees. If the transported CO2 is used in the canopy as a substrate for photosynthesis, it could account for up to 10% of the C fixed by the tree, and perhaps serve as a mechanism that buffers the response of the tree to changing CO2 levels. Our results also indicate, in agreement with previous work, that the widely used CO2 efflux approach for determining stem respiration is unreliable. We demonstrate here a field applicable approach for measuring the O2 uptake rate, which we suggest to be a more appropriate method to estimate stem respiration rates.