Secondary metabolites play important roles in plant responses to environmental stress but may also represent a large carbon (C) cost, resulting in trade-offs with other C sinks like growth and storage. However, it remains uncertain how such trade-offs may vary with changes in resource availability including water and CO ₂ availability. We conducted a glasshouse experiment with peppermint (Mentha x piperita L.) exposed to four treatments: control (sufficient irrigation and near-ambient CO ₂ ), water deficit (50% irrigation and near-ambient CO ₂ ), CO ₂ limitation (sufficient irrigation and below-ambient CO ₂ ) and the combination of water and CO ₂ deficits. Continuous ¹³ CO ₂ labelling was used to trace allocation of newly-assimilated C. Concentrations of soluble sugars significantly increased under water deficit but decreased along with aboveground biomass under low CO ₂ , while monoterpene concentrations remained relatively constant, independent of treatments. Under water deficit, there were no differences in allocation of new vs old C to monoterpenes production, structural growth and storage; plants grown under low CO ₂ even invested proportionally more newly-assimilated C for monoterpenes production, suggesting a preferential allocation to defense at the expense of growth. We concluded that C allocation to monoterpenes is actively regulated in coordination with growth and storage under water and C stresses, consistent with an optimal defense strategy to protect young tissues.