We present a detailed investigation of the gross 12C and 13C exchanges between the atmosphere and biosphere and their influence on the δ13C variations in the atmosphere. The photosynthetic discrimination Δ against 13C is derived from a biophysical model coupled to a general circulation model [Sellers et al., 1996a], where stomatal conductance and carbon assimilation are determined simultaneously with the ambient climate. The δ13C of the respired carbon is calculated by a biogeochemical model [Potter et al., 1993; Randerson et al., 1996] as the sum of the contributions from compartments with varying ages. The global flux-weighted mean photosynthetic discrimination is 12–16‰, which is lower than previous estimates. Factors that lower the discrimination are reduced stomatal conductance and C4 photosynthesis. The decreasing atmospheric δ13C causes an isotopic disequilibrium between the outgoing and incoming fluxes; the disequilibrium is ∼0.33‰ for 1988. The disequilibrium is higher than previous estimates because it accounts for the lifetime of trees and for the ages rather than turnover times of the biospheric pools. The atmospheric δ13C signature resulting from the biospheric fluxes is investigated using a three-dimensional atmospheric tracer model. The isotopic disequilibrium alone produces a hemispheric difference of ∼0.02‰ in atmospheric δ13C, comparable to the signal from a hypothetical carbon sink of 0.5 Gt C yr−1 into the midlatitude northern hemisphere biosphere. However, the rectifier effect, due to the seasonal covariation of CO2 fluxes and height of the atmospheric boundary layer, yields a background δ13C gradient of the opposite sign. These effects nearly cancel thus favoring a stronger net biospheric uptake than without the background CO2 gradient. Our analysis of the globally averaged carbon budget for the decade of the 1980s indicates that the biospheric uptake of fossil fuel CO2 is likely to be greater than the oceanic uptake; the relative proportions of the sinks cannot be uniquely determined using 12C and 13C alone. The land-ocean sink partitioning requires, in addition, information about the land use source, isotopic disequilibrium associated with gross oceanic exchanges, as well as the fractions of C3 and C4 vegetation involved in the biospheric uptake.