Atmospheric measurements suggest that the terrestrial carbon sink increased from the 1980s to the 1990s, but the causes of the increase are not well understood yet. In this study we investigated the responses of global net primary production in (NPP), soil heterotrophic respiration (HR), and net ecosystem production (NEP) to atmospheric CO2 increases and climate variation in the period 1981–1998. Our results show that the unusual climate variability in this period associated with strong warming and El Niño caused high interannual variations in terrestrial ecosystem carbon fluxes; nevertheless NPP and NEP increased consistently from the 1980s to 1990s. Annual global NPP and HR varied with a similar magnitude and contributed about equally to the interannual variations in NEP. Global NEP fluctuated between −0.64 and 1.68 Gt C yr−1 with a mean value of 0.62 Gt C yr−1, its decadal means increased from 0.23 Gt C yr−1in the 1980s to 1.10 Gt C yr−1in the 1990s. Total and vegetation carbon storage increased with increases of NPP, but soil carbon storage declined because of higher HR than litter inputs. The tropics (20°N–20°S) had higher mean NEP than the north (>20°N), however, they contributed similarly to the global NEP increase from the 1980s and 1990s. Our estimated terrestrial ecosystem carbon uptake, in response to climate variation and atmospheric CO2 increase, accounted for only about 15 to 30% of the total terrestrial carbon sink but contributed 73% of its increase from the 1980s to the 1990s.