Elevated atmospheric [CO₂] (eCₐ) often decreases stomatal conductance, which may delay the start of drought, as well as alleviate the effect of dry soil on plant water use and carbon uptake. We studied the interaction between drought and eCₐ in a whole-tree chamber experiment with Eucalyptus saligna. Trees were grown for 18 months in their Cₐ treatments before a 4-month dry-down. Trees grown in eCₐ were smaller than those grown in ambient Cₐ (aCₐ) due to an early growth setback that was maintained throughout the duration of the experiment. Pre-dawn leaf water potentials were not different between Cₐ treatments, but were lower in the drought treatment than the irrigated control. Counter to expectations, the drought treatment caused a larger reduction in canopy-average transpiration rates for trees in the eCₐ treatment compared with aCₐ. Total tree transpiration over the dry-down was positively correlated with the decrease in soil water storage, measured in the top 1.5 m, over the drying cycle; however, we could not close the water budget especially for the larger trees, suggesting soil water uptake below 1.5 m depth. Using neutron probe soil water measurements, we estimated fractional water uptake to a depth of 4.5 m and found that larger trees were able to extract more water from deep soil layers. These results highlight the interaction between rooting depth and response of tree water use to drought. The responses of tree water use to eCₐ involve interactions between tree size, root distribution and soil moisture availability that may override the expected direct effects of eCₐ. It is essential that these interactions be considered when interpreting experimental results.