Ecosystem water use efficiency (EWUE) is defined as the net carbon uptake per amount of water lost from the ecosystem and is a useful measure of the functionality in semiarid shrub and grassland communities. C₄ grasses have higher water use efficiency (WUE) than do C₃ shrubs, although it has been postulated that C₄ plants have lost much of their advantage due to the rising atmospheric CO₂ concentrations. The hypothesis was that C₄-grass-dominated ecosystems have a higher EWUE than C₃-shrub-dominated ecosystems under the present CO₂ concentration and climatic variability. Evapotranspiration (ET) and CO₂ fluxes were measured with Bowen ratio systems at a shrub and grass site for 6 years in southeastern Arizona. Two different methods were used to evaluate growing season EWUE using the ET and CO₂ fluxes. The first method estimated a net daytime growing season EWUE for the grass site at 1.74 g CO₂ · mm⁻¹ ET and 1.28 g CO₂ · mm⁻¹ ET at the shrub site. The second method estimated maximum EWUE during part of the growing season at 7.35 g CO₂ · mm⁻¹ ET for the grass site and 4.68 g CO₂ · mm⁻¹ ET for the shrub site, which was considered a significant difference at P  =  0.056. Data variability of the first method precluded a statistical difference determination between sites, but the results indicated that the grass-dominated ecosystem was between 1.4 and 1.6 times more water use efficient than the shrub-dominated ecosystem. Mean annual growing season precipitation and ET were similar in the two ecosystems, but the higher EWUE of the grassland system enabled it to take up more carbon during the growing season than the shrub ecosystem. Ecosystem differences in CO₂ and H₂O flux have important management implications including primary productivity, C sequestration, and rangeland health.