Recent advances have improved our methodological approaches and theoretical understanding of post-photosynthetic carbon isotope fractionation processes. Nevertheless we still lack a clear picture of the origin of short-term variability in δ<sup>13</sup>C of respired CO<sub>2</sub> (δ<sup>13</sup>C<sub>res</sub>) and organic carbon fractions on a diel basis. Closing this knowledge gap is essential for the application of stable isotope approaches for partitioning ecosystem respiration, tracing carbon flow through plants and ecosystems and disentangling key physiological processes in carbon metabolism of plants. In this review we examine the short-term dynamics in δ<sup>13</sup>C<sub>res</sub> and putative substrate pools at the plant, soil and ecosystem scales and discuss mechanisms, which might drive diel δ<sup>13</sup>C<sub>res</sub> dynamics at each scale. Maximum reported variation in diel δ<sup>13</sup>C<sub>res</sub> is 4.0, 5.4 and 14.8 ‰ in trunks, roots and leaves of different species and 12.5 and 8.1 ‰ at the soil and ecosystem scale in different biomes. Temporal variation in post-photosynthetic isotope fractionation related to changes in carbon allocation to different metabolic pathways is the most plausible mechanistic explanation for observed diel dynamics in δ<sup>13</sup>C<sub>res</sub>. In addition, mixing of component fluxes with different temporal dynamics and isotopic compositions add to the δ<sup>13</sup>C<sub>res</sub> variation on the soil and ecosystem level. Understanding short-term variations in δ<sup>13</sup>C<sub>res</sub> is particularly important for ecosystem studies, since δ<sup>13</sup>C<sub>res</sub> contains information on the fate of respiratory substrates, and may, therefore, provide a non-intrusive way to identify changes in carbon allocation patterns.