The evolution of terrestrial plants capable of growing upwards into the dry atmosphere profoundly transformed the Earth. A transition from small, 'non-vascular' bryophytes to arborescent vascular plants during the Devonian period is partially attributed to the evolutionary innovation of an internal vascular system capable of functioning under the substantial water tension associated with vascular water transport. Here, we show that vascular function in one of the most widespread living bryophytes (Polytrichum commune) exhibits strong functional parallels with the vascular systems of higher plants. These parallels include vascular conduits in Polytrichum that resist buckling while transporting water under tension, and leaves capable of regulating transpiration, permitting photosynthetic gas exchange without cavitation inside the vascular system. The advanced vascular function discovered in this tallest bryophyte family contrasts with the highly inefficient water use found in their leaves, emphasizing the importance of stomatal evolution enabling photosynthesis far above the soil surface. Mosses are considered non-vascular plants in botany. Here, the authors have shown that a common moss species contains vascular-like structures with physiological relevance to the water-conducting tissues of vascular plants.