The net exchanges of carbon dioxide, water vapor, and energy were examined in a perennial Colorado Plateau grassland for 5 years. The study began within a multiyear drought and continued as the drought ended. The grassland is located near the northern boundary of the influence of the North American monsoon, a major climatic feature bringing summer rain. Following rain, evapotranspiration peaked above 8 mm d−1 but was usually much smaller (2–4 mm d−1). Net productivity of the grassland was low compared to other ecosystems, with peak hourly net CO2 uptake in the spring of 4 μmol m−2 s−1 and springtime carbon gain in the range of 42 ± 11 g C m−2 (based on fluxes) to 72 ± 55 g C m−2 (based on carbon stocks; annual carbon gain was not quantified). Drought decreased gross ecosystem productivity (GEP) and total ecosystem respiration, with a much larger GEP decrease. Monsoon rains led to respiratory pulses, lasting a few days at most, and only rarely resulted in net CO2 gain, despite the fact that C4 grasses dominated plant cover. Minor CO2 uptake was observed in fall following rain. Spring CO2 uptake was regulated by deep soil moisture, which depended on precipitation in the prior fall and winter. The lack of CO2 uptake during the monsoon and the dependence of GEP on deep soil moisture are in contrast with arid grasslands of the warm deserts. Cold desert grasslands are most likely to be impacted by future changes in winter and not summer precipitation.