Increasing atmospheric CO2 concentration decreases stomatal conductance in many species, but the savings of water from reduced transpiration may permit the forest to retain greater leaf area index (L). Therefore, the net effect on water use in forest ecosystems under a higher CO2 atmosphere is difficult to predict. The free air CO2 enrichment (FACE) facility (n = 3) in a 14-m tall (in 1996) Pinus taeda L. stand was designed to reduce uncertainties in predicting such responses. Continuous measurements of precipitation, throughfall precipitation, sap flux, and soil moisture were made over 3.5 years under ambient (CO2a) and elevated (CO2e) ambient + 200 µmol mol−1). Annual stand transpiration under ambient CO2 conditions accounted for 84–96% of latent heat flux measured with the eddy-covariance technique above the canopy. Under CO2e, P. taeda transpired less per unit of leaf area only when soil drought was severe. Liquidambar styraciflua, the other major species in the forest, used progressively less water, settling at 25% reduction in sap flux density after 3.5 years under CO2e. Because P. taeda dominated the stand, and severe drought periods were of relatively short duration, the direct impact of CO2e on water savings in the stand was undetectable. Moreover, the forest used progressively more water under CO2e, probably because soil moisture availability progressively increased, probably owing to a reduction in soil evaporation caused by more litter buildup in the CO2e plots. The results suggest that, in this forest, the effect of CO2e on transpiration was greater indirectly through enhanced litter production than directly through reduced stomatal conductance. In forests composed of species more similar to L. styraciflua, water savings from stomatal closure may dominate the response to CO2e.