Background/Question/Methods   Rangelands occupy about 50% of the Earth’s land surface and thus play an important role in the terrestrial carbon (C) cycle.  For rangelands and other terrestrial ecosystems, the balance between photosynthetic uptake of carbon dioxide (CO₂) and CO₂ loss to respiration varies among years in response to inter-annual variation in climate. Variability in CO₂ exchange results from inter-annual differences in (1) environmental variables at a given point in the annual cycle (direct effects of the environment) and in (2) the response of CO₂ flux to a given change in the environment because of climate-caused changes in biological processes that regulate photosynthesis and respiration (functional change).  We used a regression procedure to distinguish contributions of functional change and direct effects of the environment to inter-annual variation in net ecosystem exchange of CO₂ (NEE) of 8 rangeland ecosystems in the western USA (58 site-years of data).  We predicted that 1) functional change is caused by inter-annual change in precipitation on each rangeland and 2) the contribution of functional change to variance in NEE increases among rangelands as mean precipitation increases. 
Results/Conclusions Functional change explained 10-40% of the variance in NEE and accounted for more than twice the variance in fluxes of direct effects of environmental variability for 6 of the 8 ecosystems.  Functional change was associated with inter-annual variation in precipitation on most rangelands but, contrary to prediction, contributed proportionally more to variance in NEE on arid than more mesic ecosystems.  Our results indicate that we must account for the influence of precipitation on flux-environment relationships in order to predict the C balance of rangeland ecosystems from climatic variables.