Remote sensing estimation of evapotranspiration (ET) directly quantifies plant water consumption and provides essential information for irrigation scheduling, which is a pressing need for California vineyards as extreme droughts become more frequent. Many ET models take satellite-derived Leaf Area Index (LAI) as a major input, but how uncertainties of LAI estimations propagate to ET and the partitioning between evaporation and transpiration is poorly understood. Here we assessed six satellite-based LAI estimation approaches using Landsat and Sentinel-2 images against ground measurements from four vineyards in California and evaluated ET sensitivity to LAI in the thermal-based two-source energy balance (TSEB) model. We found that radiative transfer modeling-based approaches predicted low to medium LAI well, but they significantly underestimated high LAI in highly clumped vine canopies (RMSE ~ 0.97 to 1.27). Cubist regression models trained with ground LAI measurements from all vineyards achieved high accuracy (RMSE ~ 0.3 to 0.48), but these empirical models did not generalize well between sites. Red edge bands and the related vegetation index (VI) from the Sentinel-2 satellite contain complementary information of LAI to VIs based on near-infrared and red bands. TSEB ET was more sensitive to positive LAI biases than negative ones. Positive LAI errors of 50% resulted in up to 50% changes in ET, while negative biases of 50% in LAI caused less than 10% deviations in ET. However, even when ET changes were minimal, negative LAI errors of 50% led to up to a 40% reduction in modeled transpiration, as soil evaporation and plant transpiration responded to LAI change divergently. These findings call for careful consideration of satellite LAI uncertainties for ET modeling, especially for the partitioning of water loss between vine and soil or cover crop for effective vineyard irrigation management.