ABSTRACT The depth of the planetary boundary layer (PBL) or mixed layer is important for carbon dioxide source/sink estimation because the response of atmospheric carbon dioxide concentration to a given amount of surface flux is inversely proportional to this depth. The PBL depth is affected by entrainment from overshooting thermals that is often underestimated in mesoscale meteorological models. An experiment was performed for the late summer of 1999 that includes a parameterization of PBL top entrainment that is based on a downward buoyancy flux at the top of the PBL. Simulations with this parameterization produce a warmer, drier and deeper boundary layer than a control simulation. The monthly mean diurnal cycle of PBL depth at a location in northern Wisconsin is better simulated with this enhanced entrainment when compared to observations. The altered atmospheric conditions cause the vegetation's stomata to respond and possibly close in an evolved response to limit water loss, thus reducing transpiration and shifting the Bowen ratio. The stomatal closing also reduces carbon assimilation, consequently altering horizontal and vertical carbon gradients. The overall effect of enhanced PBL entrainment is to alter time–mean regional gradients in CO2 mixing ratio by as much as 7 ppmv over 1000 km.