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Despite mounting evidence showing that C₄ plants can accumulate more biomass at elevated CO₂ partial pressure (p(CO₂)), the underlying mechanisms of this response are still largely unclear. In this paper, we review the current state of knowledge regarding the response of C₄ plants to elevated p(CO₂) and discuss the likely mechanisms. We identify two main routes through which elevated p(CO₂) can stimulate the growth of both well‐watered and water‐stressed C₄ plants. First, through enhanced leaf CO₂ assimilation rates due to increased intercellular p(CO₂). Second, through reduced stomatal conductance and subsequently leaf transpiration rates. Reduced transpiration rates can stimulate leaf CO₂ assimilation and growth rates by conserving soil water, improving shoot water relations and increasing leaf temperature. We argue that bundle sheath leakiness, direct CO₂ fixation in the bundle sheath or the …