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Abstract Solar‐induced fluorescence (SIF) is a proxy of ecosystem photosynthesis that often scales linearly with gross primary productivity (GPP) at the canopy scale. However, the mechanistic relationship between GPP and SIF is still uncertain, especially at smaller temporal and spatial scales. We deployed a ultra‐hyperspectral imager over two grassland sites in California throughout a soil moisture dry down. The imager has high spatial resolution that limits mixed pixels, enabling differentiation between plants and leaves within one scene. We find that imager SIF correlates well with diurnal changes in leaf‐level physiology and gross primary productivity under well‐watered conditions. These relationships deteriorate throughout the dry down event. Our results demonstrate an advancement in SIF imaging with new possibilities in remotely sensing plant canopies from the leaf to the ecosystem. These data can be used to resolve outstanding questions regarding SIF's meaning and usefulness in terrestrial ecosystem monitoring.