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• The effect of interannual climate on diameter growth was modeled using tree rings. • In species whose growth was overpredicted, climate effects improved prediction. • This climate-sensitive model forms the basis for management and carbon calculation. • This new and reproducible method can be applied to other tree species and variants. Forest management has the potential to contribute to the removal of greenhouse gasses from the atmosphere via carbon sequestration and storage. To identify management actions that will maximize carbon removal and storage over the long term, models are needed that accurately and realistically represent forest responses to changing climate. The most widely used growth and yield model in the United States (U.S.), the Forest Vegetation Simulator (FVS), which also forms the basis for several forest carbon calculators, does not currently include the direct effect of climate variation on tree growth. We incorporated the effects of climate on tree diameter growth by combining tree-ring data with forest inventory data to parameterize a suite of alternative models characterizing the growth of three dominant tree species in the arid and moisture-limited state of Utah. These species, Pinus ponderosa Dougl. ex Laws, Pseudotsuga menziesii var. glauca Mayr (Franco), and Picea engelmannii Parry ex Engelm., encompass the full elevational range of montane forest types. The alternative models we considered differed progressively from the current FVS large-tree diameter growth model, first by changing to an annual time step, then by adding interannual climate effects, followed by model simplification (removal of predictors), and finally, complexification, including effects of spatial variation in climate and two-way interactions between predictors. We validated diameter growth predictions from these models with independent observations, and evaluated model performance in terms of accuracy, precision, and bias. We then compared predictions of future growth made by the existing large-tree diameter growth model used in FVS, i.e., without climate effects, to those of our updated models, including those with climate effects. We found that simpler models of tree growth outperform the current FVS model, and that the incorporation of climate effects improves model performance for two out of three species, in which growth is currently overpredicted by FVS. Diameter growth projected with improved, climate-sensitive models is less than the future tree growth projected by the current climate-insensitive FVS model. Tree rings can be used to identify and incorporate drivers of growth variation into a stand-level growth and yield model, giving more accurate predictions of the carbon uptake potential of forests under climate change. [ABSTRACT FROM AUTHOR]