The carbon balance in terrestrial ecosystems is determined by the difference between inputs from primary production and the return of carbon to the atmosphere through decomposition of organic matter. Our understanding of the factors that control carbon turnover in water-limited ecosystems is limited, however, as studies of litter decomposition have shown contradictory results and only a modest correlation with precipitation. Here we evaluate the influence of solar radiation, soil biotic activity and soil resource availability on litter decomposition in the semi-arid Patagonian steppe using the results of manipulative experiments carried out under ambient conditions of rainfall and temperature. We show that intercepted solar radiation was the only factor that had a significant effect on the decomposition of organic matter, with attenuation of ultraviolet-B and total radiation causing a 33 and 60 per cent reduction in decomposition, respectively. We conclude that photodegradation is a dominant control on above-ground litter decomposition in this semi-arid ecosystem. Losses through photochemical mineralization may represent a short-circuit in the carbon cycle, with a substantial fraction of carbon fixed in plant biomass being lost directly to the atmosphere without cycling through soil organic matter pools. Furthermore, future changes in radiation interception due to decreased cloudiness, increased stratospheric ozone depletion, or reduced vegetative cover may have a more significant effect on the carbon balance in these water-limited ecosystems than changes in temperature or precipitation.