Forest thinning is often used as a strategy to augment water supply by decreasing stand evapotranspiration. To study the influence of such thinning on the water balance of a Larch (Larix principis-upprechtii Mayr.) plantation in the water-limited Loess Plateau of Northwest China, this study analyzed the components of the stand water balance after thinning during an extremely wet and dry year using the water balance approach. Tree transpiration (Et) was measured by tree sap flow, which was scaled to the plot level. The canopy interception loss (E-c) was estimated by subtracting the throughfall and stemflow from the gross precipitation. Unerstory evapotranspiration (E-u) was measured by weighing microlysimeters in each plot. Changes in the soil moisture were manually measured by the drying method. The results showed that thinning enhanced the stand-level soil water moisture due to the increased throughfall in the Larch plantation. Thinning induced decreases in E-t and E-c, while increasing E-u and water yield during the observation periods. With regard to the components of evapotranspiration (ET), thinning increased the contribution of E-u to ET, and decreased the contribution of E-t and E-c to ET. The decrease in LAI due to thinning also led to an increase in water yield and a decrease in both E-t and E-c. Only high-intensity thinning can maintain the water yield function under the extreme drought. Under the current conditions, thinning to less than 844 stems/hm2 may be a very good option to increase the water yield. (C) 2020 Published by Elsevier B.V.