Certain plants—including the important crops sugarcane and corn (maize), as well as other diverse species that are thought to have expanded their geographic ranges into tropical areas—have developed a special mechanism of carbon fixation that largely prevents photorespiration. The leaves of these plants have special anatomy and biochemistry. In particular, photosynthetic functions are divided between mesophyll and bundle-sheath leaf cells. The carbon-fixation pathway begins in the mesophyll cells, where carbon dioxide is converted into bicarbonate, which is then added to the three-carbon acid phosphoenolpyruvate (PEP) by an enzyme called phosphoenolpyruvate carboxylase. The product of this reaction is the four-carbon acid oxaloacetate, which is reduced to malate, another four-carbon acid, in one form of the C₄ pathway. Malate then is transported to bundle-sheath cells, which are located near the vascular system of the leaf. There, malate enters the chloroplasts and is oxidized and decarboxylated (i.e., loses CO₂) by malic enzyme. This yields high concentrations of carbon dioxide, which is fed into the Calvin-Benson cycle of the bundle sheath cells, and pyruvate, a three-carbon acid that is translocated back to the mesophyll cells. In the mesophyll chloroplasts, the enzyme pyruvate orthophosphate dikinase (PPDK) uses ATP and P_i to convert pyruvate back to PEP, completing the C₄ cycle. There are several variations of this pathway in different species. For example, the amino acids aspartate and alanine can substitute for malate and pyruvate in some species.

The C₄ pathway acts as a mechanism to build up high concentrations of carbon dioxide in the chloroplasts of the bundle sheath cells. The resulting higher level of internal carbon dioxide in these chloroplasts serves to increase the ratio of carboxylation to oxygenation, thus minimizing photorespiration. Although the plant must expend extra energy to drive this mechanism, the energy loss is more than compensated by the near elimination of photorespiration under conditions where it would otherwise occur. Sugarcane and certain other plants that employ this pathway have the highest annual yields of biomass of all species. In cool climates, where photorespiration is insignificant, C₄ plants are rare. Carbon dioxide is also used efficiently in carbohydrate synthesis in the bundle sheath.

PEP carboxylase, which is located in the mesophyll cells, is an essential enzyme in C₄ plants. In hot and dry environments, carbon dioxide concentrations inside the leaf fall when the plant closes or partially closes its stomata to reduce water loss from the leaves. Under these conditions, photorespiration is likely to occur in plants that use Rubisco as the primary carboxylating enzyme, since Rubisco adds oxygen to RuBP when carbon dioxide concentrations are low. PEP carboxylase, however, does not use oxygen as a substrate, and it has a greater affinity for carbon dioxide than Rubisco does. Thus, it has the ability to fix carbon dioxide in reduced carbon dioxide conditions, such as when the stomata on the leaves are only partially open. As a consequence, at similar rates of photosynthesis, C₄ plants lose less water when compared with C₃ plants. This explains why C₄ plants are favored in dry and warm environments.

Carbon fixation via crassulacean acid metabolism (CAM)

In addition to C₃ and C₄ species, there are many succulent plants that make use of a third photosynthetic pathway: crassulacean acid metabolism (CAM). This pathway is named after the Crassulaceae, a family in which many species display this type of metabolism, but it also occurs commonly in other families, such as the Cactaceae, the Euphorbiaceae, the Orchidaceae, and the Bromeliaceae. CAM species number more than 20,000 and span 34 families. Almost all CAM plants are angiosperms; however, quillworts and ferns also use the CAM pathway. In addition, some scientists note that CAM might be used by Welwitschia, a gymnosperm. CAM plants are often characterized by their succulence, but this quality is not pronounced in epiphytes that use the CAM pathway.

CAM plants are known for their capacity to fix carbon dioxide at night, using PEP carboxylase as the primary carboxylating enzyme and the accumulation of malate (which is made by the enzyme malate dehydrogenase) in the large vacuoles of their cells. Deacidification occurs during the day, when carbon dioxide is released from malate and fixed in the Calvin-Benson cycle, using Rubisco. During daylight hours, the stomata are closed to prevent water loss. The stomata are open at night when the air is cooler and more humid, and this setting allows the leaves of the plant to assimilate carbon dioxide. Since their stomata are closed during the day, CAM plants require considerably less water than both C₃ and C₄ plants that fix the same amount of carbon dioxide in photosynthesis.

The productivity of most CAM plants is fairly low, however. This is not an inherent trait of CAM species, because some cultivated CAM plants (e.g., Agave mapisaga and A. salmiana) can achieve a high aboveground productivity. In fact, some cultivated species that are irrigated, fertilized, and carefully pruned are highly productive. For example, prickly pear (Opuntia ficus-indica) and its thornless variety, O. amyclea, produce 4.6 kg per square meter (0.9 pound per square foot) of new growth per year. Such productivity is among the highest of any plant species. Thus, the rates of photosynthesis of CAM plants may be as high as those of C₃ plants, if morphologically similar plants adapted to the similar habitats are compared.

The unusual capacity of CAM plants to fix carbon dioxide into organic acids in the dark, causing nocturnal acidification, with deacidification occurring during the day, has been known to science since the 19th century. (There is evidence, however, that the Romans noticed the difference between the morning acid taste of some of the house plants they cultivated.) On the other hand, the C₄ pathway was discovered during the middle of the 20th century. A full appreciation of CAM as a photosynthetic pathway was greatly stimulated by analogies with C₄ species.