Abstract Accurate estimation of global evapotranspiration (ET) is essential to understand water cycle and land-atmosphere feedbacks in the Earth system. Satellite-driven ET models provide global estimates, but many of the ET algorithms have been designed independently of soil moisture observations. As water for ET is sourced from the soil, incorporating soil moisture into global remote sensing algorithms of ET should, in theory, improve performance, especially in water-limited regions. This paper presents an update to the widely-used Priestley Taylor-Jet Propulsion Laboratory (PT-JPL) ET algorithm to incorporate spatially explicit daily surface soil moisture control on soil evaporation and canopy transpiration. The updated algorithm is evaluated using 14 AmeriFlux eddy covariance towers co-located with COsmic-ray Soil Moisture Observing System (COSMOS) soil moisture observations. The new PT-JPLSM model shows reduced errors and increased explanation of variance, with the greatest improvements in water-limited regions. Soil moisture incorporation into soil evaporation improves ET estimates by reducing bias and RMSE by 29.9% and 22.7% respectively, while soil moisture incorporation into transpiration improves ET estimates by reducing bias by 30.2%, RMSE by 16.9%. We apply the algorithm globally using soil moisture observations from the Soil Moisture Active Passive Mission (SMAP). These new global estimates of ET show reduced error at finer spatial resolutions and provide a rich dataset to evaluate land surface and climate models, vegetation response to changes in water availability and environmental conditions, and anthropogenic perturbations to the water cycle.