Water availability plays a critical role in shaping terrestrial ecosystems, particularly in low- and mid-latitude regions. The sensitivity of vegetation growth to precipitation strongly regulates global vegetation dynamics and their responses to drought, yet sensitivity changes in response to climate change remain poorly understood. Here we use long-term satellite observations combined with a dynamic statistical learning approach to examine changes in the sensitivity of vegetation greenness to precipitation over the past four decades. We observe a robust increase in precipitation sensitivity (0.624% yr−1) for drylands, and a decrease (−0.618% yr−1) for wet regions. Using model simulations, we show that the contrasting trends between dry and wet regions are caused by elevated atmospheric CO2 (eCO2). eCO2 universally decreases the precipitation sensitivity by reducing leaf-level transpiration, particularly in wet regions. However, in drylands, this leaf-level transpiration reduction is overridden at the canopy scale by a large proportional increase in leaf area. The increased sensitivity for global drylands implies a potential decrease in ecosystem stability and greater impacts of droughts in these vulnerable ecosystems under continued global change.