We use the Terrestrial Ecosystem Model (TEM, Version 4.1) and the land cover data set of the international geosphere-biosphere program to investigate how increasing atmospheric CO2 concentration and climate variability during 1900-1994 affect the carbon storage of terrestrial ecosystems in the conterminous USA, and how carbon storage has been affected by land-use change. The estimates of TEM indicate that over the past 95 years a combination of increasing atmospheric CO2 with historical temperature and precipitation variability causes a 4.2% (4.3 Pg C) decrease in total carbon storage of potential vegetation in the conterminous US, with vegetation carbon decreasing by 7.2% (3.2 Pg C) and soil organic carbon decreasing by 1.9% (1.1 Pg C). Several dry periods including the 1930s and 1950s are responsible for the loss of carbon storage. Our factorial experiments indicate that precipitation variability alone decreases total carbon storage by 9.5%. Temperature variability alone does not significantly affect carbon storage. The effect of CO2 fertilization alone increases total carbon storage by 4.4%. The effects of increasing atmospheric CO2 and climate variability are not additive. Interactions among CO2, temperature and precipitation increase total carbon storage by 1.1%. Our study also shows substantial year-to-year variations in net carbon exchange between the atmosphere and terrestrial ecosystems due to climate variability. Since the 1960s, we estimate these terrestrial ecosystems have acted primarily as a sink of atmospheric CO2 as a result of wetter weather and higher atmospheric CO2 concentrations. For the 1980s, we estimate the natural terrestrial ecosystems, excluding cropland and urban areas, of the conterminous US have accumulated 78.2 Tg C yr-1 because of the combined effect of increasing atmospheric CO2 and climate variability. For the conterminous US, we estimate that the conversion of natural ecosystems to cropland and urban areas has caused a 18.2% (17.7 Pg C) reduction in total carbon storage from that estimated for potential vegetation. The carbon sink capacity of natural terrestrial ecosystems in the conterminous US is about 69% of that estimated for potential vegetation.