Atmospheric CO2 (Ca) has risen dramatically since preglacial times and is projected to double in the next century. As part of a 4-year study, we examined leaf gas exchange and photosynthetic acclimation in C3 and C4 plants using unique chambers that maintained a continuous Ca gradient from 200 to 550 µmol mol−1 in a natural grassland. Our goals were to characterize linear, nonlinear and threshold responses to increasing Ca from past to future Ca levels. Photosynthesis (A), stomatal conductance (gs), leaf water-use efficiency (A/gs) and leaf N content were measured in three common species: Bothriochloa ischaemum, a C4 perennial grass, Bromus japonicus, a C3 annual grass, and Solanum dimidiatum, a C3 perennial forb. Assimilation responses to internal CO2 concentrations (A/Ci curves) and photosynthetically active radiation (A/PAR curves) were also assessed, and acclimation parameters estimated from these data. Photosynthesis increased linearly with Ca in all species (P < 0.05). S. dimidiatum and B. ischaemum had greater carboxylation rates for Rubisco and PEP carboxylase, respectively, at subambient than superambient Ca (P < 0.05). To our knowledge, this is the first published evidence of A up-regulation at subambient Ca in the field. No species showed down-regulation at superambient Ca. Stomatal conductance generally showed curvilinear decreases with Ca in the perennial species (P < 0.05), with steeper declines over subambient Ca than superambient, suggesting that plant water relations have already changed significantly with past Ca increases. Resource-use efficiency (A/gs and A/leaf N) in all species increased linearly with Ca. As both C3 and C4 plants had significant responses in A, gs, A/gs and A/leaf N to Ca enrichment, future Ca increases in this grassland may not favour C3 species as much as originally thought. Non-linear responses and acclimation to low Ca should be incorporated into mechanistic models to better predict the effects of past and present rising Ca on grassland ecosystems.