Temperature fluctuations, a key driver of climate change, pose serious challenges in arid and hyper-arid regions, intensifying water scarcity, ecosystem degradation, threatening livelihoods and agricultural sustainability. The Cholistan Desert, Pakistan, is highly vulnerable and susceptible to temperature variations and climate-induced hydrological degradation, with escalating extremes amplifying risks to local communities. This study examines spatiotemporal temperature trend and its impact on water resources in the Cholistan Desert, Southern Punjab, using integrated advanced remote sensing, hydro-meteorological records, and field validation from 1980 to 2024. Temperature data (maximum and minimum) from five meteorological stations were acquired from the Pakistan Meteorological Department (PMD) Islamabad. Data related to water sources were collected from Cholistan development authority. Remotely sensed satellite data for Land Surface Temperature (LST), Automatic Water Extraction Index (AWEI), Normalized Difference Moisture Index (NDMI) and Temperature Vegetation Dryness Index (TVDI) from 1990-2024 were extracted from Google Earth Engine platform. Necessary data related to water scarcity was explored from field surveys and focus group discussion. The Mann-Kendall Trend Test (MKT) was applied for trend analysis, while Theil-Sen's slope (TSS) test was used to assess changes in magnitude. The results reveal that a persistent and statistically significant warming trend in air (mean monthly minimum and maximum) and land surface temperatures have been recorded in both Greater and Lesser Cholistan. DinGarh, located in Greater Cholistan, recorded higher rising trend in July mean monthly maximum temperature (0.09 degrees C/year), while Baghla station, situated in the Lesser Cholistan, exhibited a relatively lower increasing trend of 0.05 degrees C/year. Land Surface Temperature data indicate that LSTMax has increased by + 9.6 degrees C and LSTMin by + 4.7 degrees C, respectively during last three decades. The results reveal that the heatwave frequency and duration have increased about five times between 1980 and 2024. As a result, surface water coverage declined by 48% (from 65,679 to 33,644 ha), while 50% of groundwater wells ceased functioning, and around 48% of indigenous water-harvesting systems (tobbas and kunds)-dried up, from 1980 to 2024, leading to hydrological degradation and environmental crisis in the Cholistan. It is inferred that a marked deterioration in vegetation moisture content has been reported, with abrupt reduction of NDMIMax from 0.68 to 0.23 and NDMIMin from -0.13 to -0.57, between 1990 and 2024. Furthermore, TVDI values surged from 0.44 to 0.88, indicating persistent surface dryness and water stress. The findings reveal that both surface and underground water tables of the Cholistan Desert are shrinking and lowering at an alarming rate, resulting in severe water crisis. Therefore, any further climatic changes particularly shift in the temperature pattern cannot only decrease the water availability but also jeopardize for water availability and food security as well as livelihood sustainability of the population of Cholistan Desert. These findings call for urgent climate-resilient water management strategies in response to rising temperatures in this vulnerable hyper-arid region. This study provides valuable insights and nuanced knowledge for policymakers and practitioners to address the challenges of climate change and water scarcity exacerbated by high temperature trends in the Cholistan Desert. The findings are instrumental for formulating effective strategies and policies to mitigate vulnerability and strengthen the resilience of desert social-ecological systems.