The effects of terrestrial photosynthesis and respiration on the mixing ratio of atmospheric CO2 have been simulated using surface fluxes calculated using a new version of the simple biosphere model (SiB2) coupled to the Colorado State University (CSU) general circulation model (GCM). The model was integrated for 5 years from an initial condition of uniform CO2, with surface fluxes and atmospheric transport calculated on a 6-min time step. Subgrid-scale vertical transport includes the effects of cumulus and dry convection and boundary layer turbulence, with diurnal cycles of all processes well resolved. The amplitude and phase of the diurnal cycle of simulated CO2 concentration during the growing season agreed very well with observations made in Brazil, the south-eastern United States, and central Canada, and the vertical structure of the simulated diurnal variations of CO2 in the lower troposphere appears to be fairly realistic. By contrast, when the model was driven with surface fluxes of CO2 derived from monthly means saved from the on-line simulation, the diurnal cycle was much weaker than observed at all three locations and was nearly 180° out of phase with the observations. The amplitude and phase of the seasonal cycle of simulated concentration show good agreement with data collected in remote marine areas by the flask sampling network. Vertical attenuation of the seasonal amplitude in the model is stronger than observed, at least over the western Pacific ocean where seasonal data have been collected by aircraft. In the annual mean, correlations between the carbon fluxes and vertical atmospheric transport produce very strong concentration maxima over the tropical rain forests, but covariance of fluxes and transport on the seasonal time scale are more important in the middle latitudes. The effect of these correlations is to impose a vertical gradient of several parts per million on the zonal mean atmospheric CO2 concentration over biologically active regions, with the seasonal cycle contributing about 75% of the effect and the diurnal cycle contributing about 25%. The simulated annual mean meridional gradient in concentration at the flask stations is much stronger than has been simulated with off-line tracer transport models, accounting for more than half of the observed north-south gradient.