Recent experiments have found that Net Primary Productivity (NPP) can often be a positive saturating function of plant species and functional diversity. These findings raised the possibility that more diverse ecosystems might store more carbon as a result of increased photosynthetic inputs. However, carbon inputs will not only remain in plant biomass, but will be translocated to the soil via root exudation, fine root turnover, and litter fall. Thus, we must consider not just plant productivity (NPP), but also net productivity of the whole ecosystem (NEP), which itself measures net carbon storage. We currently know little about how plant diversity could influence soil processes that return carbon back to the atmosphere, such as heterotrophic respiration and decomposition of organic matter. Nevertheless, it is clear that any effects on such processes could make NPP a poor predictor of whole-ecosystem productivity, and potentially the ability of the ecosystem to store carbon. We examine the range of mechanisms by which plant diversity could influence net ecosystem productivity, incorporating processes involved with carbon uptake (productivity), loss (autotrophic and heterotrophic respiration), and residence time within the system (decomposition rate). Understanding the relationship between plant diversity and ecosystem carbon dynamics must be made a research priority if we wish to provide information relevant to global carbon policy decisions. This goal is entirely feasible if we utilize some basic methods for measuring the major fluxes of carbon into and out of the ecosystem.