Dryland ecosystems including grasslands cover up to 47% of terrestrial land and store around 15% of the global soil carbon. Land-use change (LUC) is the main human activity controlling carbon, water and energy fluxes in the soil-atmosphere continuum. International research agendas demand to increase our understanding on the impact of LUC on the capacity of ecosystems to capture and store carbon to improve forecasting tools and mitigation strategies. Net ecosystem CO2 exchange (NEE) and its biotic (leaf area index, LAI) and abiotic drivers (air temperature, T, photosynthetic photon flux density, PPFD, and volumetric soil water content, SWC) were measured at diurnal and seasonal scales in the short-grass steppe of central Mexico. Five different sites were included following a gradient of disturbance: 1) a 28 years exclosure (EXC), 2) a site dominated by commonly subordinated grasses (SPS), 3) an overgrazed site (OVG), 4) an overgrazed site with shrub encroachment and exotic species invasion (SHE) and 5) a site converted into rainfed oat crop (OAC). NEE was recorded on eight dates from October 2008 to July 2009 using the geodesic dome method. Six plots per site were established and gas exchange was measured four times along the day (08:00, 12:00, 16:00 and 20:00 h). A repeated measures ANOVA ( Results/Conclusions Along the disturbance gradient, plant cover rather than species composition controlled to greater extent NEE rates. The SPS site exhibited the highest diurnal and nocturnal NEE rates with a positive CO2 balance of 0.781 µmol m-2 s-1. The OVG site showed significantly lower NEE rates, but still a positive CO2 balance (0.236 µmol m-2 s-1). In contrast, the EXC site showed a net CO2 efflux of 0.719 µmol m-2 s-1, even higher than the SHE and OAC sites (0.204 and 0.452 µmol m-2 s-1, respectively). Diel time patterns of NEE were driven by PPFD (R2=0.95) during the wet months (October, June and July); while in the dry and warm months (March-May) the main driver was air temperature. SWC and LAI on the other hand, acted as the main seasonal drivers of NEE. These results suggest that LUC can affect carbon fluxes by modifications of plant cover and the soil water storage capacity of ecosystems. Likewise, relatively degraded areas of short-grass steppe can still function as C sinks.