Desert marginal areas with extensive oases are critical habitation zones in arid Central Asia (ACA) drylands both historically and in modern times. Reconstructing their environmental history can provide important insights into the mechanisms of desertification and oasis development in ACA. However, detailed environmental change processes in these areas during the late Quaternary and their underlying driving mechanisms remain poorly understood, largely due to the scarcity of well-dated records predating the Holocene and the lack of comprehensive regional-scale chronostratigraphic compilation. Stratigraphic archives from the desert-oasis transitional area (DOTA) of the Gurbantunggut Desert in NW China are sensitive records of late Quaternary palaeoenvironmental changes in the ACA drylands. In this study, we present detailed luminescence chronologies of three new drill cores consisting of aeolian and alluvial/oasis sediments from the DOTA of the Gurbantunggut Desert, extending stratigraphic records in the area back to the Last Glacial Maximum (LGM). By integrating these new records with published chronostratigraphic records in the DOTA of the Gurbantunggut Desert (33 profiles and 149 ages in total), we reconstructed the spatio-temporal evolution of wet-dry environmental conditions at the desert margin since the LGM, and establish a moisture index detailing moisture variability in this area over the last 13 ka. The reconstructed palaeoenvironmental changes were compared with geological records and palaeoclimate simulation data to elucidate the driving mechanisms of moisture variations in the desert marginal area. Our results show that the DOTA of the Gurbantunggut Desert was dominated by a desert environment during the LGM, with gradually wetter environments developed during the last deglaciation. The Holocene was generally wetter than the deglaciation period, and exhibited an overall trend toward a wetter environment from the early Holocene to the mid- to late Holocene, with several millennium-scale dry or wet episodes identified. We suggest that moisture changes in the DOTA of the Gurbantunggut since the LGM are primarily regulated by multiple natural forcings. The variations in Westerlies precipitation and near-surface wind strength set the environmental background and long-term moisture changing pattern on orbital and multi-millennial sub-orbital timescales, while glacial meltwater fluctuations drive millennium-scale moisture variabilities. An acceleration of desertification in the DOTA during the last 1 ka is related to reduced glacial meltwater supply and intensified human activity. A comparison of Holocene oasis age distributions in the Junggar Basin and Tarim Basin indicates that oases across the arid Xinjiang region in NW China share a similar regional-scale evolutionary pattern, with the moisture-driven mechanisms described above also governing oases development.