Drought stress is a major contributing factor to plant mortality across the globe. Drought effects are often studied at the local scale, but recent advances in remote sensing allow for observations of plant water status across broad geographic scales. The vegetation optical depth (VOD) derived from satellite-based surface microwave emission has been shown to be sensitive to canopy water content, which is increasingly recognized as an important indicator of water relations and incipient mortality in plants. We develop an index which quantifies the normalized difference between night- and daytime diurnal VOD retrievals (nVODr) and apply it across the western U.S. to determine the relative sensitivity of plants to variations in water supply (soil moisture) and atmospheric water demand (vapor pressure deficit -VPD). Canopy water content dynamics were most sensitive to soil moisture variation at intermediate climatic water deficits where tree cover transitions to grass cover. These areas are in transitional climate zones and occur at ecotones between forest and non-forest vegetation where canopy water content dynamics are most sensitive to both soil moisture and VPD variation. Our results suggest that vegetation in semi-arid ecotones is likely to see the most proximal impacts of drought stress as the planet warms.