AbstractBamboos are productive grasses that currently yield a high‐quality wood and potentially an abundance of lignocellulose for bioenergy. All are C3 grasses of warm habitats, where they are prone to significant photorespiratory inhibition and competitive suppression by C4 grasses. Here, we investigate whether three bamboo species from the Brazilian Cerrado (Dendrocalamus asper, Guadua angustifolia, and Guadua magna) exhibit unique adaptations that suppress photorespiratory costs and enhance photosynthetic efficiency. We evaluated photosynthetic efficiency of the bamboos and rice (Oryza sativa) by measuring C*, the CO2 compensation point in the absence of mitochondrial respiration. At 25℃, C* averaged 2.81 Pa in each of the bamboo species, which is closer to a C2 plant (2.71 Pa) than the C3 plant rice (3.31 Pa). Assuming a chloroplast CO2 concentration of 200 µmol mol−1, this represents an 18% lower cost of apparent photorespiration in bamboo than rice. Light and transmission electronic microscopy of the bamboo leaves exhibited few organelles in the bundle and mestome sheath cells, and mesophyll (M) cells are deeply lobed with 99% of the cell periphery adjacent to intercellular air space covered by chloroplast and stromules. The chloroplast layer in bamboo M cells is thick, with mitochondria adjacent to or engulfed by chloroplasts. This arrangement slows CO2 efflux and facilitates refixation of photorespired CO2, which could explain the low C* in the bamboos. The bamboos also had higher water use efficiency than rice, which may reflect efficient refixation of photorespired CO2.