Our simulations with the Dynamic Land Ecosystem Model (DLEM) indicate that the combined effect of ozone, climate, carbon dioxide and land use have caused China's grasslands to act as a weak carbon sink during 1961-2000. This combined effect on national grassland net primary productivity (NPP) and carbon storage was small, but changes in annual NPP and total carbon storage across China's grasslands showed substantial spatial variation, with the maximum total carbon uptake reduction of more than 400gm(-2) in some places of northeastern China. The grasslands in the central northeastern China were more sensitive and vulnerable to elevated ozone pollution than other regions. The combined effect excluding ozone could potentially lead to an increase of 14Tg C in annual NPP and 0.11Pg C in total carbon storage for the same time period. This implies that improvement in air quality could significantly increase productivity and carbon storage in China's grassland ecosystems.