Root exudation, defined as labile carbon (C) allocation into soils through fine roots, is a substantial yet often overlooked pathway of the terrestrial carbon cycle. Root exudation is likely to increase under rising levels of atmospheric CO<sub>2</sub>, but the implications of the increase in this flux are poorly understood. Increased labile C availability in soils may stimulate microbial growth and increase soil carbon storage but at the same time microbial nutrient acquisition could offset this accumulation by enhanced decomposition of soil organic matter</p> <p>Here, we implement a dynamic representation of root exudation based on plant surplus carbon and nutrient limitation in the microbial explicit terrestrial biosphere model QUINCY-JSM (QUantifying Interactions between terrestrial Nutrient CYcles and the climate system). We evaluate the effect of elevated CO<sub>2</sub> on root exudation and its consequences for microbial C, nitrogen (N) and phosphorus (P) cycling using observations from the Eucalyptus Free Air CO<sub>2</sub> Enrichment (EucFACE) experiment in a soil phosphorus impoverished forest. In the experiment, more than half of additional gross primary productivity (GPP) under elevated CO<sub>2</sub> (eCO<sub>2</sub>) could not be assigned to a measured vegetation flux.</p> <p>With the explicit implementation of root exudation, our model predicted that elevated CO<sub>2</sub> caused an increase in belowground carbon flux and an increase in microbial growth, but a limited effect on soil carbon storage. Root exudation was increased to 30 %, but more than half of this additional input was directly respired by microbes. As a result, root exudation gives a possible explanation for the not measured vegetation flux and the enhanced heterotrophic respiration under eCO<sub>2</sub> observed in the experiment. Increased C input through root exudation also enhanced microbial growth, but in order to support this growth, microbes mostly gained nutrients from decomposition and mineralization of organic matter. As a consequence, increased decomposition negated build-up of microbial necromass. Our study emphasizes the role of root exudation and microbial activity for soil carbon sequestration under elevated CO<sub>2</sub> and guides further research regarding plant-microbe interactions.