Despite mounting evidence showing that C4 plants can accumulate more biomass at elevated CO2 partial pressure (p(CO2)), the underlying mechanisms of this response are still largely unclear. In this paper, we review the current state of knowledge regarding the response of C4 plants to elevated p(CO2) and discuss the likely mechanisms. We identify two main routes through which elevated p(CO2) can stimulate the growth of both well-watered and water-stressed C4 plants. First, through enhanced leaf CO2 assimilation rates due to increased intercellular p(CO2). Second, through reduced stomatal conductance and subsequently leaf transpiration rates. Reduced transpiration rates can stimulate leaf CO2 assimilation and growth rates by conserving soil water, improving shoot water relations and increasing leaf temperature. We argue that bundle sheath leakiness, direct CO2 fixation in the bundle sheath or the presence of C3-like photosynthesis in young C4 leaves are unlikely explanations for the high CO2-responsiveness of C4 photosynthesis. The interactions between elevated p(CO2), leaf temperature and shoot water relations on the growth and photosynthesis of C4 plants are identified as key areas needing urgent research.