Changing CO₂ concentrations have and will continue to affect plant growth with consequences for ecosystem functioning. The adaptive capacity of C₃ photosynthesis to changes in atmospheric CO₂ concentrations is, however, insufficiently investigated so far. Here we focused on the phylogenetic dynamics of maximum carboxylation rate (V_cmax) and maximum electron transport rate (J_max) – two key determinants of photosynthetic efficiency in C₃ plants – and their relation to deep-time dynamics in species diversification, speciation and atmospheric CO₂ concentrations during the last 120 million years. We observed very strong positive relationships between photosynthetic efficiency and species diversification as well as speciation rates. V_cmax as well as species speciation and diversification furthermore increased during periods of low prehistoric CO₂ concentrations. From our results we conclude strong links between photosynthetic efficiency and evolutionary dynamics in C₃ plants. We furthermore conclude, that increasing future CO₂ concentrations might rather hinder than facilitate evolutionary dynamics in C₃ plants.