The stable isotopic composition of soil water is controlled by precipitation inputs, antecedent conditions, and evaporative losses. Because transpiration does not fractionate soil water isotopes, the relative proportions of evaporation and transpiration can be estimated using a simple isotopic mass balance approach. At our site in the shortgrass steppe in semi-arid northeastern Colorado, δ18O values of soil water were almost always more enriched than those of precipitation inputs, owing to evaporative losses. The proportion of water lost by evaporation (E/ET) during the growing season ranged from nil to about 40% (to >90% in the dormant season), and was related to the timing of precipitation inputs. The sum of transpiration plus evaporation losses estimated by isotopic mass balance were similar to actual evapotranspiration measured from a nearby Bowen ratio system. We also investigated the evapotranspiration response of this mixed C3/C4 grassland to doubled atmospheric [CO2] using Open-Top Chambers (OTC). Elevated atmospheric [CO2] led to increased soil-water conservation via reduced stomatal conductance, despite greater biomass growth. We used a non-invasive method to measure the δ18O of soil CO2 as a proxy for soil water, after establishing a strong relationship between δ18O of soil CO2 from non-chambered control (NC) plots and δ18O of soil–water from an adjacent area of native grassland. Soil–CO2 δ18O values showed significant treatment effects, particularly during a dry summer: values in ambient chambers (AC) were more enriched than in NC and elevated chamber (EC) plots. During the dry growing season of 2000, transpiration from the EC treatment was higher than from AC and lower than from NC treatments, but during 2001, transpiration was similar on all three treatments. Slightly higher evaporation rates from AC than either EC or NC treatments in 2000 may have resulted from increased convection across the soil surface from the OTC blowers, combined with lower biomass and litter cover on the AC treatment. Transpiration-use efficiency, or the amount of above-ground biomass produced per mm water transpired, was always greatest on EC and lowest on NC treatments.