Arbutus unedo is a sclerophyllous evergreen, characteristic of Mediterranean coastal scrub vegetation. In Italy, trees of A. unedo have been found close to natural CO2 vents where the mean atmospheric carbon dioxide concentration is about 2200 μmol mol−1. Comparisons were made between trees growing in elevated and ambient CO2 concentrations to test for evidence of adaptation to long-term exposure to elevated CO2. Leaves formed at elevated CO2 have a lower stomatal density and stomatal index and higher specific leaf area than those formed at ambient CO2, but there was no change in carbon to nitrogen ratios of the leaf tissue. Stomatal conductance was lower at elevated CO2 during rapid growth in the spring. In mid-summer, under drought stress, stomatal closure of all leaves occurred and in the autumn, when stress was relieved, the conductance of leaves at both elevated and ambient CO2 increased. In the spring, the stomatal conductance of the new flush of leaves at ambient CO2 was higher than the leaves at elevated CO2, increasing instantaneous water use efficiency at elevated CO2. Chlorophyll fluorescence measurements suggested that elevated CO2 provided some protection against photoinhibition in mid-summer. Analysis of A/Ci curves showed that there was no evidence of either upward or downward regulation of photosynthesis at elevated CO2. It is therefore anticipated that A. unedo will have higher growth rates as the ambient CO2 concentrations increase.