Increased atmospheric CO2 concentration and climate change may significantly impact the hydrological and meteorological processes of a watershed system. Quantifying and understanding hydrological responses to elevated ambient CO2 and climate change is, therefore, critical for formulating adaptive strategies for an appropriate management of water resources. In this study, the Soil and Water Assessment Tool (SWAT) model was applied to assess the effects of increased CO2 concentration and climate change in the Upper Mississippi River Basin (UMRB). The standard SWAT model was modified to represent more mechanistic vegetation type specific responses of stomatal conductance reduction and leaf area increase to elevated CO2 based on physiological studies. For estimating the historical impacts of increased CO2 in the recent past decades, the incremental (i.e., dynamic) rises of CO2 concentration at a monthly time-scale were also introduced into the model. Our study results indicated that about 1–4% of the streamflow in the UMRB during 1986 through 2008 could be attributed to the elevated CO2 concentration. In addition to evaluating a range of future climate sensitivity scenarios, the climate projections by four General Circulation Models (GCMs) under different greenhouse gas emission scenarios were used to predict the hydrological effects in the late twenty-first century (2071–2100). Our simulations demonstrated that the water yield would increase in spring and substantially decrease in summer, while soil moisture would rise in spring and decline in summer. Such an uneven distribution of water with higher variability compared to the baseline level (1961–1990) may cause an increased risk of both flooding and drought events in the basin.