To study individual and combined impacts of two important atmospheric trace gases, CO2 and O3, on C and N cycling in forest ecosystems; a multi-year experiment using a small-scale ponderosa pine (Pinus ponderosa Laws.) seedling/soil/litter system was initiated in April 1998. The experiment was conducted in outdoor, sun-lit chambers where aboveground and belowground ecological processes could be studied in detail. This paper describes the approach and methodology used, and presents preliminary data for the first two growing seasons. CO2 treatments were ambient and elevated (ambient + 280 ppm). O3 treatments were elevated (hourly averages to 159 ppb, cumulative exposure > 60 ppb O3, SUM 06 approximately 10.37 ppm h), and a low control level (nearly all hourly averages <40 ppb. SUM 06 approximately 0.07 ppm h). Significant (P < 0.05) individual and interactive effects occurred with elevated CO2 and elevated O3. Elevated CO2 increased needle-level net photosynthetic rates over both seasons. Following the first season, the highest photosynthetic rates were for trees which had previously received elevated O3 in addition to elevated CO2. Elevated CO2 increased seedling stem diameters, with the greatest increase at low O3. Elevated CO2 decreased current year needle % N in the summer. For 1-year-old needles measured in the fall there was a decrease in % N with elevated CO2 at low O3, but an increase in % N with elevated CO2 at elevated O3. Nitrogen fixation (measured by acetylene reduction) was low in ponderosa pine litter and there were no significant CO2 or O3 effects. Neither elevated CO2 nor elevated O3 affected standing root biomass or root length density. Elevated O3 decreased the % N in coarse-fine (1-2 mm diameter) but not in fine (< 1 mm diameter) roots. Both elevated CO2 and elevated O3 tended to increase the number of fungal colony forming units (CFUs) in the AC soil horizon, and elevated O3 tended to decrease bacterial CFUs in the C soil horizon. Thus, after two growing seasons we showed interactive effects of O3 and CO2 in combination, in addition to responses to CO2 or O3 alone for a ponderosa pine plant/litter/soil system.