C 4 savanna grasses fail to maintain assimilation in drying soil under low CO 2 compared with C 3 trees despite lower leaf water demand

C 4 photosynthesis evolved when grasses migrated out of contracting forests under a declining atmospheric CO 2 concentration ([CO 2 ] a ) and drying climate around 30 million years ago. C 4 grasses are hypothesised to benefit from improved plant–water relations in open habitats such as savannas, giving advantages over C 3 plants under low [CO 2 ] a . But experimental evidence in a low CO 2 environment is limited, and comparisons with C 3 trees are needed to understand savanna vegetation patterns. To test whether stomatal conductance ( g S ) and CO 2 assimilation ( A ) are maintained in drier soil for C 4 grasses than C 3 trees, particularly under low [CO 2 ] a , we investigated photosynthesis and plant–water relations of three C 3 tree and three C 4 grass species grown at 800, 400 or 200 ppm [CO 2 ] a over moderate wetting–drying cycles. C 4 grasses had a lower soil‐to‐leaf water potential gradient than C 3 trees, especially at 200 ppm [CO 2 ] a , indicating reduced leaf water demand relative to supply. Yet the dependence of g S and A on predawn leaf water potential (a measure of soil water availability) was greater for the C 4 grasses than trees, particularly under low [CO 2 ] a . Our findings establish that g S and A are not maintained in drier soil for C 4 grasses compared with C 3 trees, suggesting that this mechanism was not prevailing in the expansion of C 4 ‐dominated grasslands under low [CO 2 ] a . This inherent susceptibility to sudden decreases in soil water availability justifies why C 4 grasses have not evolved a resistant xylem allowing operation under drought, but instead shut down below a water potential threshold and rapidly recover. We point to this capacity to respond to transient water availability as a key overlooked driver of C 4 grass success under low [CO 2 ] a . A plain language summary is available for this article.