Abstract. Recent data concerning the impact of elevated atmospheric CO2 upon water use efficiency (WUE) and the related measure, instantaneous transpiration efficiency (ITE), are reviewed. It is concluded from both short and long-term studies that, at the scale of the individual leaf or plant, an increase in WUE or ITE is generally observed in response to increased atmospheric CO2 levels. However, the magnitude of this increase may decline with time. The opinion that elevated CO2 may substantially decrease transpiration at the regional scale is discussed. The mechanisms by which elevated CO2 may cause a change in these measures are discussed in terms of stomatal conductance, assimilation and respiration responses to elevated CO2. Finally, recent experimental data and model outputs concerning the impact of the interaction of increased temperature with elevated CO2 on WUE, ITE and yield are reviewed. It is concluded that substantially more data is required before reliable predictions about the regional scale response of WUE and catchment hydrology can be made.