We measured leaf-level stomatal conductance, xylem pressure potential, and stomate number and size as well as whole plant sap flow and canopy-level water vapour fluxes in a C4-tallgrass prairie in Kansas exposed to ambient and elevated CO2. Stomatal conductance was reduced by as much as 50% under elevated CO2 compared to ambient. In addition, there was a reduction in stomate number of the C4 grass, Andropogon gerardii Vitman, and the C3 dicot herb, Salvia pitcheri Torr., under elevated CO2 compared to ambient. The result was an improved water status for plants exposed to elevated CO2 which was reflected by a less negative xylem pressure potential compared to plants exposed to ambient CO2. Sap flow rates were 20 to 30% lower for plants exposed to elevated CO2 than for those exposed to ambient CO2. At the canopy level, evapotranspiration was reduced by 22% under elevated CO2. The reduced water use by the plant canopy under elevated CO2 extended the photosynthetically-active period when water became limiting in the ecosystem. The result was an increased above- and belowground biomass production in years when water stress was frequent.