The impact of climate variability on the water cycle in desert ecosystems is controlled by biospheric feedback at interannual to millennial timescales. This paper describes a unique field dataset from weighing lysimeters beneath nonvegetated and vegetated systems that unequivocally demonstrates the role of vegetation dynamics in controlling water cycle response to interannual climate variability related to El Nino southern oscillation in the Mojave Desert. Extreme El Nino winter precipitation (2.3-2.5 times normal) typical of the U.S. Southwest would be expected to increase groundwater recharge, which is critical for water resources in semiarid and arid regions. However, lysimeter data indicate that rapid increases in vegetation productivity in response to elevated winter precipitation reduced soil water storage to half of that in a nonvegetated lysimeter, thereby precluding deep drainage below the root zone that would otherwise result in groundwater recharge. Vegetation dynamics have been controlling the water cycle in interdrainage desert areas throughout the U.S. Southwest, maintaining dry soil conditions and upward soil water flow since the last glacial period (10,000-15,000 yr ago), as shown by soil water chloride accumulations. Although measurements are specific to the U.S. Southwest, correlations between satellite-based vegetation productivity and elevated precipitation related to El Nino southern oscillation indicate this model may be applicable to desert basins globally. Understanding the two-way coupling between vegetation dynamics and the water cycle is critical for predicting how climate variability influences hydrology and water resources in water-limited landscapes.