AbstractWater stress regulates land‐atmosphere carbon dioxide (CO₂) exchanges in the tropics; however, its role remains poorly characterized due to the confounding roles of radiation, temperature and canopy dynamics. In particular, uncertainty stems from the relative roles of plant‐available water (supply) and atmospheric water vapor deficit (demand) as mechanistic drivers of photosynthetic carbon (C) uptake variability. Using satellite measurements of gravity, CO₂ and fluorescence to constrain a mechanistic carbon‐water cycle model from 2001 to 2018, we found that the interannual variability (IAV) of water stress on photosynthetic C uptake was 52% greater than the combined effects of other factors. Surprisingly, the dominance of water stress on C uptake IAV was greater in the wet tropics (94%) than in the dry tropics (26%). Plant‐available water supply and atmospheric demand both contributed to the IAV of water stress on photosynthetic C uptake across the tropics, but the IAV of demand effects was 21% greater than the IAV of supply effects (33% greater in the wet tropics and 6% greater in the dry tropics). We found that the IAV of water stress on C uptake was 24% greater than the IAV of the combination of other factors in the net land‐atmosphere C sink in the whole tropics, 26% greater in the wet tropics, and 7% greater in the dry tropics. Given the recent trends in tropical precipitation and atmospheric humidity, our findings indicate that water stress——from both supply and demand——will likely dominate the climate response of land C sink across tropical ecosystems in the coming decades.