AbstractAimTerrestrial ecosystems have sequestered, on average, the equivalent of 30% of anthropogenic carbon (C) emissions during the past decades, but annual sequestration varies from year to year. For effective C management, it is imperative to develop a predictive understanding of the interannual variability (IAV) of terrestrial net ecosystem C exchange (NEE).LocationGlobal terrestrial ecosystems.MethodsWe conducted a comprehensive review to examine the IAV of NEE at global, regional and ecosystem scales. Then we outlined a conceptual framework for understanding how anomalies in climate factors impact ecological processes of C cycling and thus influence the IAV of NEE through biogeochemical regulation.ResultsThe phenomenon of IAV in land NEE has been ubiquitously observed at global, regional and ecosystem scales. Global IAV is often attributable to either tropical or semi‐arid regions, or to some combination thereof, which is still under debate. Previous studies focus on identifying climate factors as driving forces of IAV, whereas biological mechanisms underlying the IAV of ecosystem NEE are less clear. We found that climate anomalies affect the IAV of NEE primarily through their differential impacts on ecosystem C uptake and respiration. Moreover, recent studies suggest that the carbon uptake period makes less contribution than the carbon uptake amplitude to IAV in NEE. Although land models incorporate most processes underlying IAV, their efficacy to predict the IAV in NEE remains low.Main conclusionsTo improve our ability to predict future IAV of the terrestrial C cycle, we have to understand biological mechanisms through which anomalies in climate factors cause the IAV of NEE. Future research needs to pay more attention not only to the differential effects of climate anomalies on photosynthesis and respiration but also to the relative importance of the C uptake period and amplitude in causing the IAV of NEE. Ultimately, we need multiple independent approaches, such as benchmark analysis, data assimilation and time‐series statistics, to integrate data, modelling frameworks and theory to improve our ability to predict future IAV in the terrestrial C cycle.