The installation of green roofs has increased in the world’s largest cities in the last 10 yr. Apart from aesthetic aspects, a main objective is to help regulate water fluxes in the urban environment and, under certain conditions, to reduce a building’s heating requirements (by increasing thermal resistance) in winter and cooling requirements (by evaporation) in summer. We developed a theoretical approach using relevant thermal properties (heat capacity and thermal conductivity) for substrates being used for green roofs and propose an approach to modeling the interactions between water transport processes and heat flow and exchanges. Substrate water flow (using the van Genuchten approach) and heat flow were simulated for different mixtures of pozzolan and sphagnum peat. The main result was that substrate water retention properties and rain distribution throughout the year were more important for the rain/drainage balance than was substrate thickness. One-dimensional simulations of water and heat transfer at the scale of a few days showed that the overall thermal properties of the substrate were driven by its capacity to store water. While water storage capacity could appear as an advantage for rainwater management in urban areas, it could be a drawback for insulation purposes in winter. In summer, at relatively low water contents, the substrate layer limits sensible heat transfer toward the roof; however, this transfer probably remains much lower than latent heat flow from a green roof to the atmosphere due to evapotranspiration under non-limiting water uptake by plants.