Abstract: The carbon sequestration capacity of the water source area of the Middle Route of the South-to-North Water Diversion Project (hereinafter referred to as the water source area) is strongly influenced by climate variability. This study employed FORCCHN2, a second-generation individual-based forest ecosystem carbon cycling model, to estimate forest net ecosystem productivity (NEP) in the water source area from 2002 to 2020 and to assess its spatiotemporal dynamics and key driving factors. Results indicated that from 2002 to 2020, the average pixel-scale forest NEP ranged from 308.88 to 761.22 g C·m⁻²·a⁻¹, with radiation and temperature identified as primary determinants. Over this period, NEP exhibited a significant downward trend, decreasing at an average annual rate of 4.41 g C·m⁻²·a⁻¹, with spatial heterogeneity in this decline. Pixel-based correlation analysis of interannual variations in gross primary productivity (GPP), soil respiration (SR), and vegetation respiration (VR), along with their associations with climate factors, revealed that in the eastern region, rising temperatures led to a higher SR increase relative to GPP. Additionally, reductions in solar radiation in the northwest and southwest regions contributed to GPP decline in these areas.