Water-use efficiency (WUE), which links carbon and water cycles, is an important indicator of assessing the interactions between ecosystems and regional climate. Using chamber methods with and without plant removal treatments, we investigated WUE and evapotranspiration (ET) components in three ecosystems with different land-use types in Northern China pastoral-farming ecotone. In comparison, ET of the ecosystems with grazing exclusion and cultivating was 6.7 and 13.4 % higher than that of the ecosystem with free grazing. The difference in ET was primarily due to the different magnitudes of soil water evaporation (E) rather than canopy transpiration (T). Canopy WUE (WUEc, i.e., the ratio of gross primary productivity to T) at the grazing excluded and cultivated sites was 17 and 36 % higher than that at the grazing site. Ecosystem WUE (WUEnep, i.e., the ratio of net ecosystem productivity to ET) at the cultivated site was 34 and 28 % lower in comparison with grazed and grazing excluded stepped, respectively. The varied leaf area index (LAI) of different land uses was correlated with microclimate and ecosystem vapor/carbon exchange. The LAI changing with land uses should be the primary regulation of grassland WUE. These findings facilitate the mechanistic understanding of carbon-water relationships at canopy and ecosystem levels and projection of the effects of land-use change on regional climate and productivity.