C₄ photosynthesis had a mid-Tertiary origin that was tied to declining atmospheric CO₂, but C₄-dominated grasslands did not appear until late Tertiary. According to the ‘CO₂-threshold’ model, these C₄ grasslands owe their origin to a further late Miocene decline in CO₂ that gave C₄ grasses a photosynthetic advantage. This model is most appropriate for explaining replacement of C₃ grasslands by C₄ grasslands, however, fossil evidence shows C₄ grasslands replaced woodlands. An additional weakness in the threshold model is that recent estimates do not support a late Miocene drop in pCO₂. We hypothesize that late Miocene climate changes created a fire climate capable of replacing woodlands with C₄ grasslands. Critical elements were seasonality that sustained high biomass production part of year, followed by a dry season that greatly reduced fuel moisture, coupled with a monsoon climate that generated abundant lightning-igniting fires. As woodlands became more open from burning, the high light conditions favoured C₄ grasses over C₃ grasses, and in a feedback process, the elevated productivity of C₄ grasses increased highly combustible fuel loads that further increased fire activity. This hypothesis is supported by paleosol data that indicate the late Miocene expansion of C₄ grasslands was the result of grassland expansion into more mesic environments and by charcoal sediment profiles that parallel the late Miocene expansion of C₄ grasslands. Many contemporary C₄ grasslands are fire dependent and are invaded by woodlands upon cessation of burning. Thus, we maintain that the factors driving the late Miocene expansion of C₄ were the same as those responsible for maintenance of C₄ grasslands today.