Abstract It is assumed that the stimulatory effects of elevated CO2 concentration ([CO2]) on photosynthesis and growth may be substantially reduced by co-occurring environmental factors and the length of CO2 treatment. Here, we present the study exploring the interactive effects of three manipulated factors ([CO2], nitrogen supply and water availability) on physiological (gas-exchange and chlorophyll fluorescence), morphological and stoichiometric traits of Norway spruce (Picea abies) saplings after 2 and 3 years of the treatment under natural field conditions. Such multifactorial studies, going beyond two-way interactions, have received only limited attention until now. Our findings imply a significant reduction of [CO2]-enhanced rate of CO2 assimilation under reduced water availability which deepens with the severity of water depletion. Similarly, insufficient nitrogen availability leads to a down-regulation of photosynthesis under elevated [CO2] being particularly associated with reduced carboxylation efficiency of the Rubisco enzyme. Such adjustments in the photosynthesis machinery result in the stimulation of water-use efficiency under elevated [CO2] only when it is combined with a high nitrogen supply and reduced water availability. These findings indicate limited effects of elevated [CO2] on carbon uptake in temperate coniferous forests when combined with naturally low nitrogen availability and intensifying droughts during the summer periods. Such interactions have to be incorporated into the mechanistic models predicting changes in terrestrial carbon sequestration and forest growth in the future.