AbstractAccurate estimation of groundwater recharge (GR) and evapotranspiration (ET) are essential for sustainable management of groundwater resources, especially in arid and semi‐arid regions. In the Manas River Basin (MRB), water shortage is the main factor restricting sustainable development of irrigated agriculture, which relies heavily on groundwater. Film‐mulched drip irrigation significantly changes the pattern and dominant processes of water flow in the unsaturated zone, which increases the difficulty of GR and ET estimation. To better estimate GR and ET under film‐mulched drip irrigation in the MRB, bromide tracer tests and soil lithologic investigation were conducted at 12 representative sites. A one‐dimensional variably saturated flow model (HYDRUS‐1D) was calibrated at each site using soil evaporation data inferred from the bromide tracer tests. The results showed that average annual soil evaporation in uncultivated lands calculated from bromide trace tests was 25.55 mm. The annual GR ranged from 5.5 to 37.0 mm under film‐mulched drip irrigation. The annual ET ranged from 507.0 to 747.1 mm, with soil evaporation between 35.7 and 117.0 mm and transpiration between 460.9 and 642.3 mm. Soil evaporation represented 7% to 16% of the total ET and more than 70% of precipitation and irrigation water was used by cotton plants. Spatial variations of soil lithology, water table depth and initial soil water content led to the spatial differences of GR and ET in the MRB. Our study indicated that bromide tracer tests are useful for inferring ET in the arid and semi‐arid oases. The combination of bromide tracer tests and HYDRUS‐1D enhances reliability for estimation of GR and ET under film‐mulched drip irrigation in the MRB and shows promise for other similar arid inland basins around the world.