In the more than 30 million square kilometers of the terrestrial surface that is mountainous, topographic features can decouple local micro-climate from macro-climate dynamics and promote counterintuitive responses of ecosystem functioning to climate change. For example, cold air drainage from high to low elevations has pronounced effects on local temperature, which is a critical driver of ecosystem- and global carbon cycling. Due to a range of methodological challenges that have historically hindered studies of ecosystem carbon cycling in complex terrain, the links between drainage flows, climate dynamics, and ecosystem carbon cycling are largely unknown. Here we show that cold air drainage into an Appalachian mountain valley suppresses local temperature, leading to reductions in ecosystem respiration, and increases in net carbon uptake, on the order of 7.5% and 12%, respectively. Further, we show that cold air drainage proceeds more readily when cloud cover and humidity are low; resulting in the largest reductions to respiration, and greatest enhancements to net carbon uptake, on hot summer days. This counterintuitive result is neither predicted nor observed outside of the valley, where nocturnal temperature and respiration increase during dry periods. Thus, montane forests may provide a greater carbon sink than previously predicted.