Drought has been a concern in global and regional water, carbon, and energy cycles. From 1999 to 2011, northern China experienced a multiyear precipitation reduction that significantly decreased water availability as indicated by the Palmer Drought Severity Index and soil moisture measurements. In this study, a light use efficiency model (EC-LUE) and an ecosystem physiological model (IBIS) were used to characterize the impacts of long-term drought on terrestrial carbon fluxes in northern China. EC-LUE and IBIS models showed the reduction of averaged GPP of 0.09 and 0.05 Pg C yr−1 during 1999–2011 compared with 1982–1998. Based on the IBIS model, simulated ecosystem respiration experienced an insignificant decrease from 1999 to 2011. The multiyear precipitation reduction changed the regional carbon uptake of 0.011 Pg C yr−1 from 1982 to 1998 to a net source of 0.018 Pg C yr−1 from 1999 to 2011. Moreover, a pronounced decrease in maize yield in almost all provinces in the study region was found from 1999 to 2011 versus the average of yield from1978 to 2011. The largest maize yield reduction occurred in Beijing (2499 kg ha−1 yr−1), Jilin (2180 kg ha−1 yr−1), Tianjing (1923 kg ha−1 yr−1), and Heilongjiang (1791 kg ha−1 yr−1), and the maize yield anomaly was significantly correlated with the annual precipitation over the entire study area. Our results revealed that recent climate change, especially drought-induced water stress, is the dominant cause of the reduction in the terrestrial carbon sink over northern China.