Considering the temporal responses of carbon isotope discrimination (Δ13C) to local water availability in the spatial analysis of Δ13C is essential for evaluating the contribution of environmental and genetic facets of plant Δ13C. Using tree-ring Δ13C from years with contrasting water availability at 76 locations across the natural range of loblolly pine, we decomposed site-level Δ13C signals to maximum Δ13C in well-watered conditions (Δ13Cmax) and isotopic drought sensitivity (m) as a change in Δ13C per unit change of Palmer’s Drought Severity Index (PDSI). Site water status, especially the tree lifetime average PDSI, was the primary factor affecting Δ13Cmax. The strong spatial correlation exhibited by m was related to both genetic and environmental factors. The long-term average water availability during the period relevant to trees as indicated by lifetime average PDSI correlated with Δ13Cmax, suggesting acclimation in tree gas-exchange traits, independent of incident water availability. The positive correlation between lifetime average PDSI and m indicated that loblolly pines were more sensitive to drought at mesic than xeric sites. The m was found to relate to a plant’s stomatal control and may be employed as a genetic indicator of efficient water use strategies. Partitioning Δ13C to Δ13Cmax and m provided a new angle for understanding sources of variation in plant Δ13C, with several fundamental and applied implications.