Global-scale studies suggest that dryland ecosystems dominate an increasing trend in the magnitude and interannual variability of the land CO₂ sink. However, such model-based analyses are poorly constrained by measured CO₂ exchange in open shrublands, which is the most common global land cover type, covering ∼14% of Earth’s surface. Here we evaluate how the amount and seasonal timing of water availability regulate CO₂ exchange between shrublands and the atmosphere. We use eddy covariance data from six US sites across the three warm deserts of North America with observed ranges in annual precipitation of ∼100–400mm, annual temperatures of 13–18°C, and records of 2–8 years (33 site-years in total). The Chihuahuan, Sonoran and Mojave Deserts present gradients in both mean annual precipitation and its seasonal distribution between the wet-winter Mojave Desert and the wet-summer Chihuahuan Desert. We found that due to hydrologic losses during the wettest summers in the Sonoran and Chihuahuan Deserts, evapotranspiration (ET) was a better metric than precipitation of water available to drive dryland CO₂ exchange. In contrast with recent synthesis studies across diverse dryland biomes, we found that NEP could not be directly predicted from ET due to wintertime decoupling of the relationship between ecosystem respiration (R_eco) and gross ecosystem productivity (GEP). Ecosystem water use efficiency (WUE=GEP/ET) did not differ between winter and summer. Carbon use efficiency (CUE=NEP/GEP), however, was greater in winter because R_eco returned a smaller fraction of carbon to the atmosphere (23% of GEP) than in summer (77%). Combining the water-carbon relations found here with historical precipitation since 1980, we estimate that lower average winter precipitation during the 21st century reduced the net carbon sink of the three deserts by an average of 6.8TgC yr¹. Our results highlight that winter precipitation is critical to the annual carbon balance of these warm desert shrublands.