Across North America, interannual variability (IAV) in gross primary production (GPP) and net ecosystem exchange (NEE), and their relationship with environmental drivers, are poorly understood. Here, we examine IAV in GPP and NEE and their relationship to environmental drivers using two state-of-the-science flux products: NEE constrained by surface and space-based atmospheric CO2 measurements over 2010-2015 and satellite up-scaled GPP from FluxSat over 2001-2017. We show that the arid western half of North America provides a larger contribution to IAV in GPP (104% of east) and NEE (127% of east) than the eastern half, in spite of smaller magnitude of annual mean GPP and NEE. This occurs because anomalies in western North America are temporally coherent across the growing season leading to an amplification of GPP and NEE. In contrast, IAV in GPP and NEE over eastern North America are dominated by seasonal compensation effects, associated with opposite responses to temperature anomalies in spring and summer. Terrestrial biosphere models in the MsTMIP ensemble partially capture these differences between eastern and western North America, but generally underestimate the sensitivity of flux anomalies in western North America to variations in soil temperature and moisture by 0-31%. This suggests that ecosystems in western North America may be more sensitive to warming and increasing aridity than models predict, and that reductions in growing season productivity and carbon sequestration under climate change may be larger than predicted by models.