Climate data show significant increases in precipitation and humidity over the U.S. since 1900, yet the role of these hydro-climatic changes on the reported U.S. carbon sink is incompletely understood. Using a prognostic terrestrial ecosystem model, we simulated 1900--1993 continental U.S. carbon fluxes and found that increased growth by natural vegetation was associated with increased precipitation and humidity, especially during the 1950--1993 period. CO2 trends and warmer temperatures had a lesser effect. Two thirds of the increase in observed forest growth rates could be accounted for by observed climatic changes, including the confluence of earlier springs and wetter autumns leading to a lengthening of the vegetation carbon uptake period. However, regional differences in precipitation trends produced differing regional carbon sink responses. The strong coupling between carbon and hydrologic cycles implies that global carbon budget studies, currently dominated by temperature analyses, should consider changes in the hydrologic cycle.