Cumulus clouds in the atmospheric boundary layer play a key role in the hydrologic cycle, in the onset of severe weather by thunderstorms and in modulating Earth’s reflectivity and climate1. How these clouds respond to climate change, in particular over land, and how they interact with the carbon cycle are poorly understood2,3. It is expected that as a consequence of rising atmospheric CO2 concentrations the plant stomata will close4,5, leading to lower latent heat fluxes and higher sensible heat fluxes. Here we show that this causes a decline in boundary-layer cloud formation in middle latitudes. This could be partly counteracted by the greater ability of a warmer atmosphere to take up water and by a growth in biomass due to CO2 fertilization6. Our results are based on a new soil–water–atmosphere–plant model supported by comprehensive observational evidence, from which we identify the dominant atmospheric responses to plant physiological processes. They emphasize the intricate connection between biological and physical aspects of the climate system and the relevance of short-term and small-scale processes in establishing this connection.