In the leaves, water moves out of the xylem and enters the leaf cells by osmosis (the movement of water molecules from an area of high concentration to an area of low concentration).
Water evaporates from the surface of the cells inside the leaf (in the open space in the spongy mesophyll layer) and then diffuses out through the open stomata.
The evaporation of the water cause more water to rise up the xylem from the roots.
This is known as transpiration. As the water evaporates it cools the plant and also brings up minerals and water from the soil.
The flow of water through the plant from the roots to the leaves is known as the transpiration stream.