Postindustrial rises in CO2 have the potential to confound the interpretation of climatically sensitive tree-ring chronologies. Increased growth rates observed during the 20th century in strip-bark trees have been attributed to CO2 fertilization. Absent in the debate of CO2 effects on tree growth are spatially explicit analyses that examine the proximate mechanisms that lead to changes in rates of tree growth. Twenty-seven pairs of strip-bark and companion entire-bark trees were analyzed in a spatially explicit framework for abiotic environmental correlates. The strip-bark tree locations were not random but correlated to an abiotic proxy for soil moisture. The strip-bark trees showed a characteristic increase in growth rates after about 1875. Furthermore, the difference in growth rates between the strip-bark trees and entire-bark companions increased with increasing soil moisture. A possible mechanism for these findings is that CO2 is affecting water-use efficiency, which in turn affects tree-ring growth. These results point to the importance of accounting for microsite variability in analyzing the potential role of CO2 in governing growth responses.