Rising atmospheric CO2 is expected to increase global temperatures, plant water-use efficiency, and carbon storage in the terrestrial biosphere. A CO2 fertilization effect on terrestrial vegetation is predicted to cause global greening as the potential ecospace for forests expands. However, leaf-level fertilization effects, such as increased productivity and water-use efficiency, have not been documented from fossil leaves in periods of heightened atmospheric CO2. Here, we use leaf gas-exchange modeling on a well-preserved fossil flora from early Miocene New Zealand, as well as two previously published tropical floras from the same time period, to reconstruct atmospheric CO2, leaf-level productivity, and intrinsic water-use efficiency. Leaf gas-exchange rates reconstructed from early Miocene fossils, which grew at southern temperate and tropical latitudes when global average temperatures were 5-6 °C higher than today, reveal that atmospheric CO2 was ∼450-550 ppm. Early Miocene CO2 was similar to projected values for 2040 CE and is consistent with an Earth system sensitivity of 3-7 °C to a doubling of CO2. The Southern Hemisphere temperate leaves had higher reconstructed productivity than modern analogs, likely due to a longer growing season. This higher productivity was presumably mirrored at northern temperate latitudes as well, where a greater availability of landmass would have led to increased carbon storage in forest biomass relative to today. Intrinsic water-use efficiency of both temperate and tropical forest trees was high, toward the upper limit of the range for modern trees, which likely expanded the habitable range in regions that could not support forests with high moisture demands under lower atmospheric CO2. Overall, early Miocene elevated atmospheric CO2 sustained globally higher temperatures, and our results provide the first empirical evidence of concomitant enhanced intrinsic water-use efficiency, indicating a forest fertilization effect.