Much concern has been raised regarding how and to what extent climate change and intensive human activities have altered water use efficiency (WUE, amount of carbon uptake per unit of water use) in monsoon Asia. By using a process-based ecosystem model [dynamic land ecosystem model (DLEM)], we examined effects of climate change, land use/cover change, and land management practices (i.e. irrigation and nitrogen fertilization) on WUE in terrestrial ecosystems of monsoon Asia during 1948–2000. Our simulations indicated that due to climate variability/change, WUE in the entire area decreased by 3·6% during the study period, with the largest decrease of 6·8% in the 1990s. Grassland was the most sensitive biome to a drying climate, with a decrease of 16·2% in WUE in the 1990s. Land conversion from natural vegetation to croplands, accounting for 79% of the total converted land areas, led to a decrease in WUE, with the largest decrease of 42% while forest was converted to cropland. In contrast, WUE increased by more than 50% while cropland was converted to natural vegetation. Simulated results also showed that intensive land management practices could alleviate the decrease in WUE induced by climate change and land conversion. Changes in WUE showed substantial spatial variation, varying from the largest decrease of over 50% in northwestern China and some areas of Mongolia to the largest increase of over 30% in western, southern China, and large areas of India. To adapt to climate change and sustain terrestrial ecosystem production, more attention ought to be paid to enhance water use efficiency through land use and management practices, especially in the drying areas. Copyright © 2011 John Wiley & Sons, Ltd.