Satellite observations reveal a greening of the globe over recent decades. The role in this greening of the “CO2 fertilization” effect—the enhancement of photosynthesis due to rising CO2 levels—is yet to be established. The direct CO2 effect on vegetation should be most clearly expressed in warm, arid environments where water is the dominant limit to vegetation growth. Using gas exchange theory, we predict that the 14% increase in atmospheric CO2 (1982–2010) led to a 5 to 10% increase in green foliage cover in warm, arid environments. Satellite observations, analyzed to remove the effect of variations in precipitation, show that cover across these environments has increased by 11%. Our results confirm that the anticipated CO2 fertilization effect is occurring alongside ongoing anthropogenic perturbations to the carbon cycle and that the fertilization effect is now a significant land surface process.