Rising atmospheric CO2 concentrations can fertilize plant growth. The resulting increased plant uptake of CO2 could, in turn, slow increases in atmospheric CO2 levels and associated climate warming. CO2 fertilization effects may be enhanced when water availability is low, because elevated CO2 also leads to improved plant water-use efficiency. However, CO2 fertilization effects may be weaker when plant growth is limited by nutrient availability. How variation in soil nutrients and water may act together to influence CO2 fertilization is unresolved. Here we report plant biomass levels from a five-year, open-air experiment in a perennial grassland under two contrasting levels of atmospheric CO2, soil nitrogen and summer rainfall, respectively. We find that the presence of a CO2 fertilization effect depends on the amount of available nitrogen and water. Specifically, elevated CO2 levels led to an increase in plant biomass of more than 33% when summer rainfall, nitrogen supply, or both were at the higher levels (ambient for rainfall and elevated for soil nitrogen). But elevated CO2 concentrations did not increase plant biomass when both rainfall and nitrogen were at their lower level. We conclude that given widespread, simultaneous limitation by water and nutrients, large stimulation of biomass by rising atmospheric CO2 concentrations may not be ubiquitous.