Environmental and management factors are critical in determining the C source or sink status of agroecosystems. Information on the C dynamics of an ecosystem from source to sink and vice versa are critical in determining the role of that ecosystem in regional and global C balances. We investigated the impact of the 2011 mega-drought on seasonal changes in net CO2 exchange of a WW-B. Dahl Old World bluestem [Bothriochloa bladhii (Retz) S.T. Blake] pasture in the Texas High Plains and compared the results with those from 2010, a hydrologically wet year. Carbon dioxide flux between the vegetation and atmosphere was measured using an eddy covariance flux tower. Our results indicate that net ecosystem exchange, ecosystem respiration, and gross primary production for this agroecosystem were strongly affected by environmental variables and grazing. During the period of measurement in 2010 (Days of the Year 152–365), the pasture accumulated 164 g C m–2 and was a net C sink. During the same period in 2011, the severe drought changed the dynamics of the pasture from a C sink to a source, with a net cumulative loss of 142 g C m–2. Ecosystem respiration was an exponential function of soil temperature in both years. When extreme water-limiting days were excluded, the exponential model explained 90% of the variation in ecosystem respiration in 2011 and 92% of the variation in ecosystem respiration in 2010. Incorporating the results from our study with ecosystem models can improve our understanding of the contributions of managed pastures to regional C balances.