Summary Stable carbon isotope ratios (δ13C) of terrestrial plants are employed across a diverse range of applications in environmental and plant sciences; however, the kind of information that is desired from the δ13C signal often differs. At the extremes, it ranges between purely environmental and purely biological. Here, we review environmental drivers of variation in carbon isotope discrimination (Δ) in terrestrial plants, and the biological processes that can either damp or amplify the response. For C3 plants, where Δ is primarily controlled by the ratio of intercellular to ambient CO2 concentrations (ci/ca), coordination between stomatal conductance and photosynthesis and leaf area adjustment tends to constrain the potential environmentally driven range of Δ. For C4 plants, variation in bundle-sheath leakiness to CO2 can either damp or amplify the effects of ci/ca on Δ. For plants with crassulacean acid metabolism (CAM), Δ varies over a relatively large range as a function of the proportion of daytime to night-time CO2 fixation. This range can be substantially broadened by environmental effects on Δ when carbon uptake takes place primarily during the day. The effective use of Δ across its full range of applications will require a holistic view of the interplay between environmental control and physiological modulation of the environmental signal.