We combine soil moisture (SM) data from AMSR-E and AMSR-2, and changes in terrestrial water storage (TWS) from time-variable gravity data from GRACE to delineate and characterize the evolution of drought and its impact on vegetation growth. GRACE-derived TWS provides spatially continuous observations of changes in overall water supply and regional drought extent, persistence and severity, while satellite-derived SM provides enhanced delineation of shallow-depth soil water supply. Together these data provide complementary metrics quantifying available plant water supply. We use these data to investigate the supply changes from water components at different depths in relation to satellite-based enhanced vegetation index (EVI) and gross primary productivity (GPP) from MODIS and solar-induced fluorescence (SIF) from GOME-2, during and following major drought events observed in the state of Texas, USA and its surrounding semiarid area for the past decade. We find that in normal years the spatial pattern of the vegetation–moisture relationship follows the gradient in mean annual precipitation. However since the 2011 hydrological drought, vegetation growth shows enhanced sensitivity to surface SM variations in the grassland area located in central Texas, implying that the grassland, although susceptible to drought, has the capacity for a speedy recovery. Vegetation dependency on TWS weakens in the shrub-dominated west and strengthens in the grassland and forest area spanning from central to eastern Texas, consistent with changes in water supply pattern. We find that in normal years GRACE TWS shows strong coupling and similar characteristic time scale to surface SM, while in drier years GRACE TWS manifests stronger persistence, implying longer recovery time and prolonged water supply constraint on vegetation growth. The synergistic combination of GRACE TWS and surface SM, along with remote-sensing vegetation observations provides new insights into drought impact on vegetation–moisture relationship, and unique information regarding vegetation resilience and the recovery of hydrological drought.