This review summarizes current understanding of the mechanisms that underlie the response of photosynthesis and stomatal conductance to elevated carbon dioxide concentration ([CO2]), and examines how downstream processes and environmental constraints modulate these two fundamental responses. The results from free-air CO2 enrichment (FACE) experiments were summarized via meta-analysis to quantify the mean responses of stomatal and photosynthetic parameters to elevated [CO2]. Elevation of [CO2] in FACE experiments reduced stomatal conductance by 22%, yet, this reduction was not associated with a similar change in stomatal density. Elevated [CO2] stimulated light-saturated photosynthesis (Asat) in C3 plants grown in FACE by an average of 31%. However, the magnitude of the increase in Asat varied with functional group and environment. Functional groups with ribulose-1,5-bisphosphate carboxylase/oxygenase (Rubisco)-limited photosynthesis at elevated [CO2] had greater potential for increases in Asat than those where photosynthesis became ribulose-1,5-bisphosphate (RubP)-limited at elevated [CO2]. Both nitrogen supply and sink capacity modulated the response of photosynthesis to elevated [CO2] through their impact on the acclimation of carboxylation capacity. Increased understanding of the molecular and biochemical mechanisms by which plants respond to elevated [CO2], and the feedback of environmental factors upon them, will improve our ability to predict ecosystem responses to rising [CO2] and increase our potential to adapt crops and managed ecosystems to future atmospheric [CO2].