This study evaluates the potential impact of clouds on ecosystem CO2 and CO2 isotope fluxes (“isofluxes”) in two contrasting ecosystems (a broadleaf deciduous forest and a C4 grassland) in a region for which cloud cover, meteorological, and isotope data are available for driving the isotope‐enabled land surface model (ISOLSM). Our model results indicate a large impact of clouds on ecosystem CO2 fluxes and isofluxes. Despite lower irradiance on partly cloudy and cloudy days, predicted forest canopy photosynthesis was substantially higher than on clear, sunny days, and the highest carbon uptake was achieved on the cloudiest day. This effect was driven by a large increase in light‐limited shade leaf photosynthesis following an increase in the diffuse fraction of irradiance. Photosynthetic isofluxes, by contrast, were largest on partly cloudy days, as leaf water isotopic composition was only slightly depleted and photosynthesis was enhanced, as compared to adjacent clear‐sky days. On the cloudiest day, the forest exhibited intermediate isofluxes: although photosynthesis was highest on this day, leaf‐to‐atmosphere isofluxes were reduced from a feedback of transpiration on canopy relative humidity and leaf water. Photosynthesis and isofluxes were both reduced in the C4 grass canopy with increasing cloud cover and diffuse fraction as a result of near‐constant light limitation of photosynthesis. These results suggest that some of the unexplained variation in global mean δ18O of CO2 may be driven by large‐scale changes in clouds and aerosols and their impacts on diffuse radiation, photosynthesis, and relative humidity.