The climatic controls on decomposition rates have gained considerable interest in recent years because of a perceived risk that elevated global temperatures could lead to positive green house gas feedbacks from soil ecosystems. Previous relationships between decomposition rates and abiotic variables like temperature and moisture have been proved confounding, particularly for dryland ecosystems. Decomposition rates of two grass species, Pseudoroegneria spicata (Pursh) Á. Löve and Calamagrostis rubescens Buckley, which represent dominant understory cover at either end of a semi-arid grassland to forest ecocline near Kamloops, British Columbia, Canada, were measured. Despite differences in %N and C:N, decomposition rates between the two species were similar. Elevation was strongly correlated with rate of decomposition for both species. We provide evidence of a positive correlation of water availability and a negative correlation of temperature on decomposition rates along the elevational ecocline. Decomposition rates were higher during the wetter spring period than during summer, at higher elevations and in more mesic ecosystems. We found no ‘home-field’ advantage for P. spicata and C. rubescens on decomposition rates. Our results provide evidence that available moisture is an important control on decomposition rates in dryland ecosystems.