To enhance global bioenergy production, the Brazilian industry's interest in using sugarcane (Sacchanim officinarum) straw as a feedstock for electricity and cellulosic ethanol production has increased recently. However, indiscriminate straw removal may negatively affect key soil functions related to water infiltration, retention, and availability to plants.Therefore, a microlysimeter system with a 0.2 m soil column was built to evaluate the effects of straw removal rates on water drainage and water storage in a sandy clay loam soil from a commercial sugarcane field in southeastern Brazil.The experiment was conducted in an open area where the lysimeter system was subjected to rainfall. After assembly, the treatments consisting of four straw amounts of 0, 3, 6, and 12 Mg ha(-1) were applied, representing straw removal rates of 100\% (bare soil), 75\%, 50\%, and 0\%, respectively. The water drainage was quantified and collected for 17 months, and the soil water storage was measured over a two-month period. The soil water holding capacity was calibrated by an inverse modeling approach minimizing the differences between soil water storage measured in the field and simulated by a water balance model. Our results reveal that the amount of water drained from bare soil was 30\% lower than no removal treatment. Bare soil had the lowest water storage for most of the days, indicating a greater susceptibility to losing water through evaporation and drying. The long-term simulation for early, mid, and late sugarcane harvest seasons suggests longer periods of water restriction to crop growth under higher straw removal rates (i.e., 100\% and 75\%), potentially impairing sugarcane growth and thus yield. Also, the findings suggest that partial residue maintenance, up to 6 Mg ha(-1) of straw (50\% removal) on the soil surface, seems to be sufficient to prevent excessive water losses and daily variations of soil water content, sustaining soil water storage rates above the critical point for sugarcane growth.