Changes in precipitation patterns and N cycling across the globe are likely to affect ecosystem primary productivity and CO2 exchanges, especially in arid and semi-arid grasslands. To evaluate the effects of water and N availability on ecosystem CO2 fluxes, we conducted a manipulative field experiment with water and N addition in a temperate semiarid steppe in 2006 and 2007 with remarkably different amount of natural precipitation. For each growing season (June–September), water (15 mm) was added about every 2 weeks, which summed up to about 120 mm year−1. N (as urea) was added at a rate of 6.96 gN m−2 every month during the same period. Variations of the growing-season CO2 fluxes, including net ecosystem exchange (NEE), gross ecosystem photosynthesis (GEP) and ecosystem respiration (ER) were examined. Net carbon uptake was found in all treatments over the growing season in both years, with the growing season average NEE ranging from −1.27 to −5.59 μmol m−2 s−1. During two growing seasons, water and N addition significantly increased NEE (+42% and +30% in 2006 and 2007, respectively), because greater stimulation of GEP than ER. Net primary productivity, especially grass biomass, correlated closely with variation in GEP and ER. Precipitation (and thus soil moisture) regulated seasonal and inter-annual variations in GEP and ER, and subsequently NEE. Moreover, both water and N addition effects depended greatly on the initial water condition in this temperate semiarid steppe.