As greenhouse gases, including CO2, accumulate in the atmosphere, the western United States is predicted to undergo large-scale climate warming and reduced summer precipitation in the coming decades. In this study we explore the role of these climate changes with elevated CO2 to determine the plant physiological response on primary productivity and associated feedbacks on evapotranspiration (ET) and runoff using a biogeochemistry model, TEM-Hydro, with downscaled climate data for the western United States from the NCAR CCSM3 A2 scenario. Net primary productivity increases by 32% in forests due to feedbacks between warmer temperatures and enhanced nitrogen mineralization but decreases in shrublands by 24% due to excessive drying and reduced nitrogen mineralization. Warming directly increases nitrogen mineralization rates but indirectly decreases them by reducing soil moisture, so the net effect is highly dependent on climatic conditions within each biome. Increased soil moisture resulting from larger water use efficiency from the elevated CO2 leads to more net nitrogen mineralization in forests, which reduces N-limiting conditions. The effect of CO2 on stomatal conductance is therefore enhanced because of its effect on reducing nitrogen limiting conditions. Runoff decreases over the 21st century by 22% in forests, 58% in grasslands, and 67% in shrublands due to the reduced precipitation in each region but is modulated by the plant-induced changes in ET. The role of moisture limitation is therefore a crucial regulator of nitrogen limitation, which determines the future productivity and water availability in the West.