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To test the prediction that elevated CO2 increases the maximum leaf area index (LAI) through a stimulation of photosynthesis, we exposed model herbaceous communities to two levels of CO2 crossed with two levels of soil fertility. Elevated CO2 stimulated the initial rate of canopy development and increased cumulative LAI integrated over the growth period, but it had no effect on the maximum LAI. In contrast to CO2, increased soil nutrient availability caused a substantial increase in maximum LAI. Elevated CO2 caused a slight increase in leaf area and nitrogen allocated to upper canopy layers and may have stimulated leaf turnover deep in the canopy. Gas exchange measurements of intact communities made near the time of maximum LAI indicated that soil nutrient availability, but not CO2 enrichment, caused a substantial stimulation of net ecosystem carbon exchange. These data do not support our prediction of a higher maximum LAI by elevated CO2 because the initial stimulation of LAI diminished by the end of the growth period. However, early in development, leaf area and carbon assimilation of communities may have been greatly enhanced. These results suggest that the rate of canopy development in annual communities may be accelerated with future increases in atmospheric CO2 but that maximum LAI is set by soil fertility.