Terrestrial ecosystem respiration increases exponentially with temperature, constituting a positive feedback loop accelerating global warming. However, the response of ecosystem respiration to temperature strongly depends on water availability, yet where and when the water effects are important, is presently poorly constrained, introducing uncertainties in climate-carbon cycle feedback projections. Here, we disentangle the effects of temperature and precipitation (a proxy for water availability) on ecosystem respiration by analysing eddy covariance CO2 flux measurements across 212 globally distributed sites. We reveal a threshold precipitation function, determined by the balance between precipitation and ecosystem water demand, which separates temperature-limited and water-limited respiration. Respiration is temperature limited for precipitation above that threshold function, whereas in drier areas water limitation reduces the temperature sensitivity of respiration and its positive feedback to global warming. If the trend of expansion of water-limited areas with warming climate over the last decades continues, the positive feedback of ecosystem respiration is likely to be weakened and counteracted by the increasing water limitation.