Forests have a key role as carbon sinks, which could potentially mitigate the continuing increase in atmospheric carbon dioxide concentration and associated climate change. We show that carbon dioxide enrichment, although causing short-term growth stimulation in a range of European tree species, also leads to an increase in soil microbial respiration and a marked decline in sequestration of root-derived carbon in the soil. These findings indicate that, should similar processes operate in forest ecosystems, the size of the annual terrestrial carbon sink may be substantially reduced, resulting in a positive feedback on the rate of increase in atmospheric carbon dioxide concentration.