Terrestrial ecosystems contribute most of the interannual variability (IAV) in atmospheric carbon dioxide (CO 2 ) concentrations, but processes driving the IAV of net ecosystem CO 2 exchange (NEE) remain elusive. For a predictive understanding of the global C cycle, it is imperative to identify indicators associated with ecological processes that determine the IAV of NEE. Here, we decompose the annual NEE of global terrestrial ecosystems into their phenological and physiological components, namely maximum carbon uptake (MCU) and release (MCR), the carbon uptake period (CUP), and two parameters, α and β, that describe the ratio between actual versus hypothetical maximum C sink and source, respectively. Using long-term observed NEE from 66 eddy covariance sites and global products derived from FLUXNET observations, we found that the IAV of NEE is determined predominately by MCU at the global scale, which explains 48% of the IAV of NEE on average while α, CUP, β, and MCR explain 14%, 25%, 2%, and 8%, respectively. These patterns differ in water-limited ecosystems versus temperature-and radiation-limited ecosystems; 31% of the IAV of NEE is determined by the IAV of CUP in water-limited ecosystems, and 60% of the IAV of NEE is determined by the IAV of MCU in temperature-and radiation-limited ecosystems. The Lund-Potsdam-Jena (LPJ) model and the Multi-scale Synthesis and Terrestrial Model Inter-comparison Project (MsTMIP) models underestimate the contribution of MCU to the IAV of NEE by about 18% on average, and overestimate the contribution of CUP by about 25%. This study provides a new perspective on the proximate causes of the IAV of NEE, which suggest that capturing the variability of MCU is critical for modeling the IAV of NEE across most of the global land surface. K E Y W O R D S carbon uptake period, interannual variability, maximum carbon uptake rate, net ecosystem exchange, phenology, physiology S U PP O RTI N G I N FO R M ATI O N Additional supporting information may be found online in the Supporting Information section at the end of the article. How to cite this article: Fu Z, Stoy PC, Poulter B, et al. Maximum carbon uptake rate dominates the interannual variability of global net ecosystem exchange. Glob Change Biol. 2019;25:3381-3394. https ://doi.