Abstract. Continuous measurements of net ecosystem CO₂ exchange (NEE) using the eddy-covariance method were made over an agricultural ecosystem in the southeastern US. During optimum environmental conditions, photosynthetically active radiation (PAR) was the primary driver controlling daytime NEE, accounting for as much as 67 to 89% of the variation in NEE. However, soil water content became the dominant factor limiting the NEE-PAR response during the peak growth stage. NEE was significantly depressed when high PAR values coincided with very low soil water content. The presence of a counter-clockwise hysteresis of daytime NEE with PAR was observed during periods of water stress. This is a result of the stomatal closure control of photosynthesis at high vapor pressure deficit and enhanced respiration at high temperature. This result is significant since this hysteresis effect limits the range of applicability of the Michaelis-Menten equation and other related expressions in the determination of daytime NEE as a function of PAR. The systematic presence of hysteresis in the response of NEE to PAR suggests that the gap-filling technique based on a non-linear regression approach should take into account the presence of water-limited field conditions. Including this step is therefore likely to improve current evaluation of ecosystem response to increased precipitation variability arising from climatic changes.