Eight-year-old Norway spruce (Piceaabies (L.) Karst.) and 6-year-old red oak (Quercusrubra L.) trees planted directly into the soil were enclosed in open-top chambers and exposed to either 350 or 700 μmol•mol⁻¹ of CO₂ for three growing seasons. During the third year a natural drought was allowed to develop, reducing the predawn leaf water potential to between −0.80 and −1.15 MPa. Intensive gas-exchange measurements were performed before, during, and after the drought. CO₂ response curves revealed mesophyll limitation to photosynthesis in drought-stressed trees grown in elevated levels of CO₂. The water-use efficiency was greater for trees grown at elevated CO₂, but less so during drought in red oak and the same between treatments for drought-stressed spruce. Diurnal measurements showed that enhancement of assimilation rates of trees grown at 700 μmol•mol⁻¹ depended upon the time of day that measurements were made. There was an acclimation to increased CO₂ in both species that could not be explained by leaf area differences, available soil for roots, nutrient limitation, or starch accumulation.