In theory, increasing sensitivity of primary productivity to precipitation variability is a biophysical symptom of dryland degradation, or "desertification," but empirical tests of this in the context of biological invasions are scant. To test the potential for exotic grass invasion to exacerbate biophysical symptoms of desertification, we measured the biomass and biodiversity of herbaceous plant assemblages along a 41-248 mm/year precipitation gradient across the Mojave and San Joaquin Deserts within communities at high versus low levels of exotic grass invasion and under shrub canopies versus interstitial space, over 5 years. Exotic grass invasion doubled the conversion rate of precipitation into biomass, and native shrubs increased ecosystem sensitivity to precipitation through strong facilitation of exotic grasses. Invasion-driven increases in biomass production corresponded to significant decreases in native biodiversity. We propose that shrub facilitation of exotic grasses accelerated desertification by promoting a non-native flora that is highly sensitive to precipitation variability and strongly linked to biodiversity degradation. Suppressing exotic grasses and managing facilitated invasion will help mitigate desertification.