Capillary water, serving as a crucial intermediary between groundwater and crop root layer moisture, is important for both soil retention and crop utilization. To investigate the effect of mulched drip irrigation (MDI) on upward capillary water in cotton fields with different application years (0, 10, 14, 18, 20, and 24 years) in the saline–sodic region of Northwest China, an indoor soil column test (one-dimensional capillary water rise experiment) was conducted. The results showed that the wetting front transport law, capillary water recharge, and wetting front transport rate over time exhibited an increasing trend in the early stages of MDI application (10 and 14 years), peaking at 18 years of application, followed by a decreasing trend. The relationship between the capillary water recharge and rising height was fitted based on the Green–Ampt model, and their slopes reveal that 14 and 18 years of MDI application required the largest amount of water per unit distance, indicating an excellent water-holding capacity beneficial for plant growth. Conversely, 0 years required the smallest amount of water per unit distance. Based on the movement characteristics of upper capillary water, we confirmed that the MDI application years (0–18 years) improves soil infiltration capacity, while the long-term application years (18–24 years) reduces groundwater replenishment to the soil. Furthermore, the HYDRUS-1D model was employed to simulate the capillary water rise process and soil moisture distribution under different MDl application years. The results showed an excellent consistency with the soil column experiments, confirming the accuracy of HYDRUS-1D in simulating the capillary water dynamics in saline–sodic areas. The results would provide suggestions to achieve the sustainable development of long-term drip-irrigated cotton fields.