A three-dimensional tracer inversion model is described that couples atmospheric CO2 transport with prescribed and adjustable source/sink components of the global car- bon cycle to predict atmospheric CO2 concentration and 13C/12C isotopic ratio taking account of exchange fluxes of atmospheric CO2 with the terrestrial biosphere and the oceans. Industrial CO2 emissions are prescribed from fuel production data. Transport of CO2 is prescribed by a model, TM2, that employs 9 vertical levels from the earth’s surface to 10 mb, a numerical time step of 4 hours, and a grid spacing of approxi- mately 8° of latitude and 10° of longitude. Horizontal advection is specified from analyzed observations of wind. Vertical advection is consistent with mass conservation of wind within each grid box. Convective mixing and vertical diffusion are determined at each time step from meteorological data. The source/sink components represent various CO2 exchanges, some sources to the atmosphere, others sinks. The study focuses on establishing interannual variability in net terrestrial biospheric and net oceanic fluxes with the atmosphere revealed by variability in atmospheric CO2, taking account of possible stimulation of land plant growth ("CO2 fertilization") and oceanic CO2 uptake, as well as industrial CO2 emissions. Net primary production of land plants (NPP) and heterotrophic respiration are specified to vary only seasonally, on the basis of data averaged from 1982-1990, inclusive. NPP is determined from a vegetative index, NDVI, derived from remotely sensed radiometric data from satellites. Heterotrophic respiration is a function of surface air temperature. Oceanic exchange of CO2 varies seasonally as specified by a coefficient of CO2 gas exchange. Spatial varia- bility of all source/sink components is specified for each 8° x 10° grid box of TM2, a priori, for 5 terrestrial biospheric and 5 oceanic source/sink components, and with respect to emissions of industrial CO2. Spatial variations of terrestrial exchange are made proportional to NPP. Heterotrophic respiration similarly varies by setting its annual average for each grid box equal to NPP. Spatial variations in oceanic CO2 exchange take account of gas exchange dependence on wind speed and temperature and, in the tropics, on a time-invariant spatially variable specification of the partial pressure of CO2 of surface sea water, based on direct observations. Carbon-isotopic fractionation is taken into account for all chemical processes modeled. To produce an optimal fit to observations of atmospheric CO2, the inversion model adjusts the magnitude of 7 additional source/sink components divided with respect to tropical, temperate, and polar geographic zones. There are 4 terrestrial zones, excluding a southern polar zone of negligible importance. There are 3 oceanic zones: one tropical, and one combined temperate/polar zone in each hemisphere. Calculations are carried out in a quasi-stationary mode that repeats a single annual cycle 4 times, and saves the results for the final year. Alternatively, the model has been run in an extended response mode that takes account of a 4-year history of atmospheric CO2 response to a pulse introduced during the first year of this history. Interannual variations in exchange are established by adjusting the model to predict atmospheric CO2 concentration and 13C/12C ratio averaged for annual periods at overlapping 6-month intervals. Net CO2 exchange fluxes, seasonally adjusted, were determined from 1981-1999, inclusive, using atmospheric CO2 data reported by Keeling et al. .