Elevated atmospheric CO concentration (eC ) might reduce forest water-use, due to decreased transpiration, following partial stomatal closure, thus enhancing water-use efficiency and productivity at low water availability. If evapotranspiration (E ) is reduced, it may subsequently increase soil water storage (ÎS) or surface runoff (R) and drainage (D ), although these could be offset or even reversed by changes in vegetation structure, mainly increased leaf area index (L). To understand the effect of eC in a water-limited ecosystem, we tested whether 2 years of eC (~40% increase) affected the hydrological partitioning in a mature water-limited Eucalyptus woodland exposed to Free-Air CO Enrichment (FACE). This timeframe allowed us to evaluate whether physiological effects of eC reduced stand water-use irrespective of L, which was unaffected by eC in this timeframe. We hypothesized that eC would reduce tree-canopy transpiration (E ), but excess water from reduced E would be lost via increased soil evaporation and understory transpiration (E ) with no increase in ÎS, R or D . We computed E , ÎS, R and D from measurements of sapflow velocity, L, soil water content (Ξ), understory micrometeorology, throughfall and stemflow. We found that eC did not affect E , E , ÎS or Ξ at any depth (to 4.5 m) over the experimental period. We closed the water balance for dry seasons with no differences in the partitioning to R and D between C levels. Soil temperature and Ξ were the main drivers of E while vapour pressure deficit-controlled E , though eC did not significantly affect any of these relationships. Our results suggest that in the short-term, eC does not significantly affect ecosystem water-use at this site. We conclude that water-savings under eC mediated by either direct effects on plant transpiration or by indirect effects via changes in L or soil moisture availability are unlikely in water-limited mature eucalypt woodlands.