Plant responses to major environmental drivers like precipitation can influence important aspects of carbon (C) cycling like soil CO2 efflux (
JCO2
). These responses may be predicted by two independent classes of drivers: plant size—larger plants respire more and produce a larger quantity of labile C, and plant economics—plants possessing more acquisitive plant economics strategies (i.e. high metabolic rate and tissue nutrient content) produce higher‐quality tissue that respires rapidly and decomposes quickly.
At two sites in central Texas, USA with similar climates and differing soil characteristics, we examined the response of eight Panicum virgatum genotypes to three annual precipitation levels defined by the driest, average and wettest years from each site's precipitation history. We evaluated the individual and joint influence of plant genotypes and precipitation on
JCO2
and traits related to plant economics and plant size. We then used confirmatory path analysis to evaluate whether effects of precipitation on
JCO2
were in part related to effects of precipitation on plant economics traits or size (‘mediated’ effects).
These genotypes exhibited variation in plant economics traits and above‐ground net primary productivity (ANPP), an above‐ground measure of plant size. Increasing precipitation increased
JCO2
and ANPP more than plant economics traits. At both sites, ANPP was the best predictor of
JCO2
. Moreover, the sites differed in the ways that plant size and plant economics traits combined with precipitation to influence
JCO2
. At the Austin site, the positive effect of precipitation on
JCO2
was mediated primarily by ANPP, offset by a smaller effect of leaf nitrogen content; no direct precipitation effect was detected. At the Temple site, increasing precipitation had positive direct and ANPP‐mediated effects on
JCO2
. This suggests that greater water limitation at Austin may strengthen the links between plant size and
JCO2
.
Synthesis. Estimates of C cycling can be improved by accounting for mediation of precipitation effects on
JCO2
by plant economics traits and plant size in resource‐limited environments.