Abstract Terrestrial ecosystem regulation of carbon and water fluxes is critical for constraining climate–biosphere feedbacks but remains poorly quantified across space and time. Here, we evaluate whether co‐located observations from NASA’s Orbiting Carbon Observatory‐3 (OCO‐3) and the ECOsystem Spaceborne Thermal Radiometer Experiment on Space Station (ECOSTRESS) can reproduce ecosystem water use efficiency (WUE) dynamics observed at FLUXNET sites across temporal scales, vegetation types, climates, and drought conditions. We created the ECOCO3 data set, which harmonizes OCO‐3 and ECOSTRESS observations in space and time. ECOCO3 captures broad seasonal and diurnal carbon and water flux patterns including midday drought responses. Sampling sensitivity analysis shows that ECOCO3 is primarily limited by available sample size for distinguishing vegetation and climate driven differences in WUE. Our findings highlight both the promise and limitations of remote sensing for resolving sub‐daily carbon–water coupling.