As large-scale vegetation restoration has remained a strategic initiative in water-limited areas, the potentially conflicting demands for water between ecosystems and human must be thoroughly investigated to promote sustainable vegetation restoration management. On the Loess Plateau, Northwest China, long-term vegetation restoration significantly affects hydrological processes, yet phased variations in the effects of vegetation restoration on the basin-scale annual streamflow have rarely been reported, which is necessary for optimising and managing current vegetation restoration measures. In this study, the annual streamflow changes in 25 subbasins (1980-2020) were systematically analysed to explore the effects of vegetation restoration on the annual streamflow at different stages. By utilizing the Pettitt method for mutation testing and the Mann-Kendall test for trend analysis, three stages were identified: 1980-1995 (P1), 1995-2010 (P2), and 2010-2020 (P3). The contributions of climate (precipitation, PET) and land cover changes to streamflow variations were quantified via the elasticity coefficient method. Our results revealed abrupt decrease in annual streamflow during P2, mainly driven by land cover changes (contribution rate: 30%-86%), linked to vegetation area expansion and quality enhancement (NDVI). During P3, the annual streamflow stabilised or slightly increased with reduced land cover contributions (<= 40%), and the impact of cliamtic factors were more significant. The hydrological effects of vegetation restoration peaked around 2010, suggesting a rebalancing between annual streamflow consumption and vegetation cover increase. Furthermore, after 2010, vegetation quality improvement was more critical to mitigate streamflow reduction and to ensure sustainable water management than vegetation area expansion. These findings indicate the need for phased vegetation restoration strategies to balance the ecological benefits and water resources sustainability in water-limited areas.