Since the onset of the industrial revolution, atmospheric CO2 concentration has increased exponentially to the current 370 μmol mol−1 level, and continued increases are expected. Previous research has demonstrated that elevated atmospheric CO2 results in larger plants returning greater amounts of C to the soil. However, the effects of elevated CO2 on C and N cycling and long-term storage of C in soil have not been examined. Soil samples (in 0–50, 50–100, and 100–200 mm depth increments) were collected after 3 years of cotton (Gossypium hirsutum L.) production under free-air CO2 enrichment (FACE, at 550 μmol CO2 mol−1), in combination with 2 years of different soil moisture regimes (wet, 100% of evapotranspiration replaced, or dry, 75% and 67% of evapotranspiration replaced in 1990 and 1991, respectively) on a Trix clay loam (fine, loamy, mixed (calcareous), hyperthermic Typic Torrifluvent) at Maricopa, Arizona. Ambient plots (370 μmol CO2 mol−1 (control)), in combination with the wet and dry soil moisture regimes, were also included in the study. Soil organic C and N concentrations, potential C and N mineralization, and C turnover were measured. Increased input of cotton plant residues under FACE resulted in treatment differences and trends toward increased organic C in all three soil depths. During the first 30 days of laboratory incubation, available N apparently limited potential C mineralization and C turnover in all treatments. Between 30 and 60 days of incubation, soils from FACE plots had greater potential C mineralization with both water regimes, but C turnover increased in soils from the dry treatment and decreased in soils where cotton was not water stressed. These data indicate that in high-CO2 environments without water stress, increased C storage in soil is likely, but it is less likely where water stress is a factor. More research is needed before the ability of soil to store additional C in a high-CO2 world can be determined.