The influences of prior monsoon-season drought (PMSD) and the seasonal timing of episodic rainfall ('pulses') on carbon and water exchange in water-limited ecosystems are poorly quantified. *In the present study, we estimated net ecosystem exchange of CO(2) (NEE) and evapotranspiration (ET) before, and for 15 d following, experimental irrigation in a semi-arid grassland during June and August 2003. Rainout shelters near Tucson, Arizona, USA, were positioned on contrasting soils (clay and sand) and planted with native (Heteropogon contortus) or non-native invasive (Eragrostis lehmanniana) C4 bunchgrasses. Plots received increased ('wet') or decreased ('dry') monsoon-season (July-September) rainfall during 2002 and 2003. Following a June 2003 39-mm pulse, species treatments had similar NEE and ET dynamics including 15-d integrated NEE (NEE(pulse)). Contrary to predictions, PMSD increased net C uptake during June in plots of both species. Greater flux rates after an August 2003 39-mm pulse reflected biotic activity associated with the North American Monsoon. Furthermore, August NEE(pulse) and ecosystem pulse-use efficiency (PUE(e) = NEE(pulse)/ET(pulse)) was greatest in Heteropogon plots. PMSD and rainfall seasonal timing may interact with bunchgrass invasions to alter NEE and ET dynamics with consequences for PUE(e) in water-limited ecosystems.