Climate change intensifies the challenges surrounding water cycling and vegetation dynamics in arid desert ecosystems, calling for detailed observations to decode adaptive plant strategies and support restoration efforts. This study analyzes interannual variations in water budgets and vegetation coverage in two distinct desert systems-K. foliatum (midstream) and R. songarica (downstream)-within the Heihe River Basin from 2016 to 2021. We uncover a pronounced ecohydrological contrast: the K. foliatum ecosystem displays substantial soil moisture variability alongside high precipitation and evapotranspiration rates, leading to a soil water deficit. In contrast, the R. songarica ecosystem maintains minimal moisture fluctuation under extreme aridity, yet records a slight water surplus. Notably, vegetation coverage in K. foliatum closely correlates with soil water storage, precipitation, and evapotranspiration, whereas R. songarica exhibits no significant hydrological coupling, implying a pulsed response to episodic rainfall. Groundwater recharge emerges as a key compensatory mechanism against rainfall shortages in midstream regions. These findings underscore the need for region-specific management-prioritizing groundwater conservation downstream and intelligent irrigation regulation midstream-offering a science-backed pathway for restoring and managing water resources in arid inland basins under climate change.