Intergovernmental Panel on Climate Change (IPCC) estimates indicate that potential changes in seasonal rainfall and temperature patterns in central North America and the African Sahel will have a greater impact on biological response (such as plant production and biogeochemical cycling) and feedback to climate than changes in the overall amount of annual rainfall. Simulation of grassland and dryland ecosystem responses to climate and CO2 changes demonstrates the sensitivity of plant productivity and soil C storage to projected changes in precipitation, temperature and atmospheric CO2. Using three different land cover projections, changes in C levels in the grassland and dryland regions from 1800 to 1990 were estimated to be -13.2, -25.5 and -14.7 Pg, i.e., a net source of C due to land cover removal resulting from cropland conversion. Projections into the future based on a double-CO2 climate including climate-driven shifts in biome areas by the year 2040 resulted in a net sink of +5.6, +27.4 and +26.8 Pg, respectively, based upon sustainable grassland management. The increase in C storage resulted mainly from an increase in area for the warm grassland sub-biome, together with increased soil organic matter. Preliminary modeling estimates of soil C losses due to 50 yr of regressive land management in these grassland and dryland ecoregions result in a 11 Pg loss relative to current conditions, and a potential loss of 37 Pg during a 50 yr period relative to sustainable land-use practices, an average source of 0.7 Pg C yr-1. Estimates of the cost of a 20 yr rehabilitation program are 5 to 8 x 109 US$ yr-1, for a C sequestering cost of approximately 10 US$ per tC.