The Priestley-Taylor (PT) approximation for computing evapotranspiration was initially developed for conditions of a horizontally uniform saturated surface sufficiently extended to obviate any significant advection of energy. Nevertheless, the PT approach has been effectively implemented within the framework of a thermal-based two-source model (TSM) of the surface energy balance, yielding reasonable latent heat flux estimates over a range in vegetative cover and climate conditions. In the TSM, however, the PT approach is applied only to the canopy component of the latent heat flux, which may behave more conservatively than the bulk (soil + canopy) system. The objective of this research is to investigate the response of the canopy and bulk PT parameters to varying leaf area index (LAI) and vapor pressure deficit (VPD) in both natural and agricultural vegetated systems, to better understand the utility and limitations of this approximation within the context of the TSM. Micrometeorological flux measurements collected at multiple sites under a wide range of atmospheric conditions were used to implement an optimization scheme, assessing the value of the PT parameter for best performance of the TSM. Overall, the findings suggest that within the context of the TSM, the optimal canopy PT coefficient for agricultural crops appears to have a fairly conservative value of ~1.2 except when under very high vapor pressure deficit (VPD) conditions, when its value increases. For natural vegetation (primarily grasslands), the optimal canopy PT coefficient assumed lower values on average (~0.9) and dropped even further at high values of VPD. This analysis provides some insight as to why the PT approach, initially developed for regional estimates of potential evapotranspiration, can be used successfully in the TSM scheme to yield reliable heat flux estimates over a variety of land cover types.