Eddy correlation measurements of CO2 flux made during May--October 1987 and June--August 1989 were employed, in conjunction with simulated data, to examine the net exchange of CO2 in a temperate grassland ecosystem. Simulated estimates of CO2 uptake were used when flux meaurements were not available. These estimates were based on daily intercepted photosynthetically active radiation, air temperature, and extractable soil water. Soil CO2 flux and dark respiration of the aerial part of plants were estimated using the relationships developed by Norman et al. (1992) and Polley et al. (1992) at the study site. Our results that the CO2 exchange between this ecosystem and the atmosphere is highly variable. The net ecosystem CO2 exchange reached its peak value (12--18 g m-2 d-1) during the period when the leaf area index was maximum. Drought, a frequent occurrence in this region, can change this ecosystem from a sink to a source for atmospheric CO2. The degree to which this grassland can become a source of CO2 appears to depend not only on the severity and duration of the drought but also on the timing of the drought event in relation to the growth stage of the prairie vegetation. Comparison with data on dry matter indicated that the aboveground biomass accounted for about 45--70% of the net carbon uptake, suggesting the importance of the below ground biomass in estimating net primary productivity in this ecosystem. ¿ American Geophysical Union 1992