In forests, the canopy effect produces ¹³C-depleted plants and a gradient of leaf δ¹³C values from ground to canopy; the most negative values are near the ground. Explanations for this phenomenon include recycling of ¹³C-depleted CO₂ in the forest, fractionation due to photosynthesis in low light, and other physiological causes. We report δ¹³C measurements for CO₂ at different heights in two forests of the upper Amazon basin. The results show that much of the ¹³C depletion in leaves derives from photosynthetic recycling of CO₂ produced by forest soil respiration. Recycling does not, however, account adequately for the observed height gradient in δ¹³C values which must be due to an additional factor(s). ¹³C-depleted forest CO₂ is also photosynthesized by plants in forest clearings. Furthermore, the canopy effect is passed along the foodchain to forest and aquatic fauna, as well as humans. This is of particular importance when using carbon isotopes to reconstruct prehistoric dietary regimes, e.g. the use of maize in Amazonia.