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 (Vcmax) and maximum electron transport rate (Jmax) – 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. Vcmax 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.