This study investigates effects of climate warming (+ 2.5°C ubove ambient) and elevated CO2 concentration (600 μmol mol−1) on the stomatal functioning and the water relations of Lolium perenne, using Free Air Temperature Increase (FATI) and Free Air CO2 Enrichment (FACE). Compared to growth at ambient temperature, whole-season temperature increase reduced leaf stomatal conductance, but only at the top of the canopy (-14.6 and -8.8% at ambient and elevated CO2, respectively). However, because higher canopy temperature raised the leaf-to-air vapour pressure difference, leaf transpiration rate increased (+28% at ambient and +48% at elevated CO2) and instantaneous leaf water use efficiency, derived from short-term measurements of assimilation and transpiration rate, declined (-11% at ambient and -13% at elevated CO2). Nevertheless, at the stand level, growth at + 2.5°C reduced transpiration due to fewer tillers per plant and a smaller leaf area per tiller. This sparser vegetation was also more closely coupled to the atmosphere and maintained a drier internal microclimate. To assess whether the stomatal behaviour observed in this experiment could be explained by prevailing concepts of stomatal functioning, three models were applied (Cowan 1977; Ball, Woodrow & Berry 1987; Leuning 1995). The latter model accounted for the highest proportion of variability in the data (58%) and was insensitive to CO2 and temperature regime, which suggests that the principles of stomatal regulation are not affected by changes in CO2 or climate.