Sustainable bioenergy production depends upon the efficiency with which crops use available water to produce biomass and store carbon belowground. Therefore, water use efficiency (WUE; productivity vs. annual evapotranspiration, ET) is a key metric of bioenergy crop performance. We evaluate WUE of three potential perennial grass bioenergy crops, Miscanthus × giganteus (miscanthus), Panicum virgatum (switchgrass), and an assemblage of prairie species (28 species), and Zea mays–Glycine max rotation, during the establishment phase in Illinois. Ecosystem WUE (EWUE; net ecosystem productivity vs. ET) was highest in miscanthus, reaching a maximum value of 12.8 ± 0.3 kg ha–1 mm–1 in the third year, followed by switchgrass (7.5 ± 0.3 kg ha–1 mm–1) and prairie (3.9 ± 0.3 kg ha–1 mm–1); the row crop was the lowest. Besides EWUE, harvest-WUE (HWUE, harvested biomass vs. ET) and net biome productivity-WUE (BWUE, calculated as net ecosystem production – harvest vs. ET) were also estimated for all crops and years. After three years of establishment, HWUE and BWUE were highest in miscanthus (9.0 ± 2 and 3.8 ± 2.9 kg ha–1 mm–1, respectively) providing a net benefit to the carbon balance, while the row crops had a negative carbon balance and a negative BWUE. BWUE for maize/soybean indicate that this ecosystem would deplete the soil carbon stocks while using the water resources. Switchgrass had the second highest BWUE, while prairie was almost neutral indicating that long-term carbon sequestration for this agro-ecosystem would be sensitive to harvest timing with an early harvest removing more biomass, and thus carbon, from the field.