Drylands cover over 40% of the Earth’s surface, account for one third of global carbon cycling, and are hotspots for climate change, with more frequent and severe droughts coupled with deluges of novel magnitude and frequency. Because of their large terrestrial extent, elucidating dryland ecosystem responses to changes in water availability is critical for a comprehensive understanding of controls on global aboveground net primary productivity (ANPP), an important ecosystem service. The focus of this dissertation is to investigate cause-effect mechanisms between altered water availability and ecosystem processes in dryland ecosystems. Across a network of experimental rainfall manipulations within a semiarid Chihuahuan Desert grassland, I examined short- and long-term dynamics of multiple ecosystem processes—from plant phenology to nitrogen cycling—in response to directional precipitation extremes. Aboveground, I found herbaceous plant phenology to be more sensitive in greenup timing compared to deep-rooted, woody shrubs, implying that precipitation extremes will disproportionately affect grass-dominated compared to woody ecosystems. Surprisingly, after 14 years of experimentally adding water and N, I observed no effect on ANPP. Belowground, bulk soil N dynamics remained stable with differing precipitation amounts. However, mineral associated organic N (MAOM-N) significantly increased under chronic N inputs, indicating potential for dryland soil N sequestration. Conversely, the difference between low- and high-N soil N content may increase a drawdown of N from all soil N pools under low-N conditions whereas plants source N from fertilizer input under high-N conditions. Finally, I considered ecosystem-level acclimation to climate change. I found that N availability decreased with annual precipitation in space across continents, but it posed initially increasing trends in response to rainfall extremes at the Jornada that decreased after 14 years. Mechanisms for the acclimation process are thus likely associated with differential lags to changes in precipitation between plants and microorganisms. Overall, my dissertation demonstrates that examining linkages between multiple ecosystem processes, from aboveground phenological cycles to belowground N cycling dynamics, can provide a more integrative understanding of dryland response to climate change. Because dryland range is potentially expanding globally, water limited systems provide a unique and critical focus area for future research that revisit and revise current ecological paradigms.