The efforts to explain the ‘missing sink’ for anthropogenic carbon dioxide (CO2) have included in recent years the role of nitrogen as an important constraint for biospheric carbon fluxes. We used the Nitrogen Carbon Interaction Model (NCIM) to investigate patterns of carbon and nitrogen storage in different compartments of the terrestrial biosphere as a consequence of a rising atmospheric CO2 concentration, in combination with varying levels of nitrogen availability. This model has separate but closely coupled carbon and nitrogen cycles with a focus on soil processes and soil–plant interactions, including an active compartment of soil microorganisms decomposing litter residues and competing with plants for available nitrogen. Biological nitrogen fixation is represented as a function of vegetation nitrogen demand. The model was validated against several global datasets of soil and vegetation carbon and nitrogen pools. Five model experiments were carried out for the modeling periods 1860–2002 and 2002–2100. In these experiments we varied the nitrogen availability using different combinations of biological nitrogen fixation, denitrification, leaching of soluble nitrogen compounds with constant or rising atmospheric CO2 concentrations. Oversupply with nitrogen, in an experiment with nitrogen fixation, but no nitrogen losses, together with constant atmospheric CO2, led to some carbon sequestration in organismic pools, which was nearly compensated by losses of C from soil organic carbon pools. Rising atmospheric CO2 always led to carbon sequestration in the biosphere. Considering an open nitrogen cycle including dynamic nitrogen fixation, and nitrogen losses from denitrification and leaching, the carbon sequestration in the biosphere is of a magnitude comparable to current observation based estimates of the ‘missing sink.’ A fertilization feedback between the carbon and nitrogen cycles occurred in this experiment, which was much stronger than the sum of separate influences of high nitrogen supply and rising atmospheric CO2. The demand-driven biological nitrogen fixation was mainly responsible for this result. For the modeling period 2002–2100, NCIM predicts continued carbon sequestration in the low range of previously published estimates, combined with a plausible rate of CO2-driven biological nitrogen fixation and substantial redistribution of nitrogen from soil to plant pools.