Aim: Widespread greening and an increasing global terrestrial carbon sink over recent decades have been reported. However, the spatio-temporal relationships between vegetation greenness and productivity and the factors influencing this relationship remain unclear. We define a new metric of ecosystem-scale photosynthetic efficiency (EPE) to analyse its spatio-temporal pattern and investigate how potential drivers regulate the greenness–productivity relationship. Location: Global. Time period: From 2001 to 2016. Major taxa studied: Global terrestrial ecosystems. Methods: This study used global datasets of leaf area index (LAI) and solar-induced fluorescence (SIF) as proxies of vegetation greenness and ecosystem productivity, respectively, to propose a new metric of SIF/LAI, representing ecosystem-scale photosynthetic efficiency (EPE). We identified the spatial pattern and dynamics of EPE and examined factors influencing EPE. Results: The results showed a weaker increase in productivity compared with the global greening rate from 2001 to 2016, suggesting a decline in EPE at the global scale. This decline in EPE indicates a disproportionate increase in terrestrial productivity against the widespread greening. When stratified into areas following an aridity gradient, we found that EPE overall showed upward trends in arid and semi-arid areas, and downward trends in dry sub-humid and humid regions. The EPE was controlled primarily by soil moisture, which promoted or constrained the EPE in xeric and mesic ecosystems, respectively. Moreover, the increase in short vegetation cover and atmospheric water demand contributed positively or negatively to EPE changes in xeric and mesic ecosystems, respectively. Main conclusions: Our study shows that greening of the Earth is associated with decreasing EPE, revealing that current rates of carbon sequestration do not increase proportionally to greening of the Earth and highlighting that soil moisture is a key controller of EPE. These results help to reduce the uncertainties in future climate change impacts on vegetation dynamics, thus having implications for sustainable ecosystem management and climate change mitigation.