An increasing amount of grasslands in Inner Mongolia of Northern China has been converted to cropland. The conversions in this extensive semiarid region have produced adverse ecological consequences at local and regional scales (e.g., dust storms). An important research need is to understand the fundamental ecosystem processes, such as energy and material fluxes, associated with the land conversions. The carbon fluxes, including net ecosystem exchange (NEE), ecosystem respiration (RE), and gross primary production (GPP) in two contrasting land-use settings – a typical steppe and a crop field in Inner Mongolia – were measured in the growing season (May–September) of 2005 by deploying two eddy covariance flux towers. The diel amplitude of carbon fluxes varied substantially within the growing season, with the largest diel changes occurring in July. The daily maximum NEE of the two ecosystems occurred before noon, while maximum RE occurred around 16:00 pm. There was no difference in RE between the cropland and the steppe at night. Daytime RE in the steppe was higher than that in the cropland in July and August, but slightly lower in other months. GPP was similar between the two ecosystems, in June, but much higher in the cropland than in the steppe in July. The steppe was converted from a weak carbon sink in May to a weak source or carbon neutral in June because of the relatively low soil volumetric water content (VWC) and the relatively high temperature. With higher GPP and lower RE, the cropland ecosystem acted as a stronger sink in July than the steppe. Temperature and soil water content were the main factors controlling NEE in this semiarid agriculture-pasture transition region.