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We used the terrestrial ecosystem model “Century” to evaluate the relative roles of water and nitrogen limitation of net primary productivity, spatially and in response to climate variability. Within ecology, there has been considerable confusion and controversy over the large-scale significance of limitation of net primary production (NPP) by nutrients versus biophysical quantities (e.g., heat, water, and sunlight) with considerable evidence supporting both views. The Century model, run to a quasi-steady state condition, predicts “equilibration” of water with nutrient limitation, because carbon fixation and nitrogen fluxes (inputs and losses) are controlled by water fluxes, and the capture of nitrogen into organic matter is governed by carbon fixation. Patterns in the coupled water, nitrogen, and carbon cycles are modified substantially by ecosystem type or species-specific controls over resource use efficiency (water and nitrogen used per unit NPP), detrital chemistry, and soil water holding capacity. We also examined the coupling between water and nutrients during several temperature perturbation experiments. Model experiments forced by satellite-observed temperatures suggest that climate anomalies can result in significant changes to terrestrial carbon dynamics. The cooling associated with the Mount Pinatubo eruption aerosol injection may have transiently increased terrestrial carbon storage. However, because processes in the water, carbon, and nitrogen cycles have different response times, model behavior during the return to steady state following perturbation was complex and extended for decades after 1- to 5-year perturbations. Thus consequences of climate anomalies are influenced by the climatic conditions of the preceding years, and climate-carbon correlations may not be simple to interpret.