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This study investigated the impacts of environmental (e.g., climate and CO2 level) and ecological (e.g., stand density) factors on the long-term growth and physiology of ponderosa pine (Pinus ponderosa) in a semi-arid north American grassland. We hypothesized that ponderosa pine long-term growth patterns were positively influenced by an increase in atmospheric CO2 concentrations and a decrease in stand density. To test this hypothesis, comparison of long-term trends in tree-ring width and carbon and oxygen stable isotopic composition of trees growing in dense and sparse forest stands were carried out at two sites located in the Nebraska National Forest. Results indicated that tree-ring growth increased over time, more at the sparse than at the dense stands. In addition, the carbon and oxygen isotopic ratios showed long-term increases in intrinsic water use efficiency (WUEi), with little difference between dense and sparse stands. We found a clear trend over time in ponderosa pine tree growth and WUEi, mechanistically linked to long-term changes in global CO2 concentration. The study also highlighted that global factors tend to outweigh local effects of stand density in determining long-term trends in ponderosa pine growth. Finally, we discuss the implications of these results for woody encroachment into grasslands of Nebraska and we underlined how the use of long-term time series is crucial for understanding those ecosystems and to guarantee their conservation.