Abstract. Water is essential for life. Specifically in the oases of inland arid basins, water is a critically limited resource, essential for the development of the socio-economy and the sustainability of eco-environmental systems. Due to the unique hydrological regime present in arid oases, a moderate groundwater table is the goal of sustainable water management. A shallow water table induces serious secondary salinization and collapse of agriculture, while a deep water table causes deterioration of natural vegetation. From the hydrological perspective, the exchange flux between the unsaturated vadose zone and groundwater reservoir is a critical link to understanding regional water table dynamics. This flux is substantially influenced by anthropogenic activities. In the Tarim River basin of western China, where agriculture consumes over 90% of available water resources, the exchange flux between the unsaturated vadose zone and groundwater reservoir is influenced strongly by irrigation. Recently, mulched drip irrigation, a sophisticated water-saving irrigation method, was widely applied in the Tarim River basin, which greatly impacted the exchange flux and thus the regional groundwater dynamics. Capitalizing on recent progress in evaporation measurement techniques, we can now close the water balance and directly quantify the exchange flux at the field scale, thus gaining a better understanding of regional groundwater dynamics. In this study, comprehensive observations of water balance components in an irrigated cropland were implemented in 2012 and 2013 in a typical oasis within the Tarim River basin. The water balance analysis showed that the exchange flux and groundwater dynamics were significantly altered by the application of water-saving irrigation. The exchange flux at the groundwater table is mostly downward (310.5 mm year−1), especially during drip irrigation period and spring flush period, while the upward flux is trivial (16.1 mm year−1) due to the moderate groundwater table depth (annual average depth 2.9 m). Traditional secondary salinization caused by intense phreatic evaporation (fed by upward exchange flux) is alleviated. However, a new form of secondary salinization may be introduced unwittingly if there is lack of water for periodic flushing, especially when brackish water is used in the irrigation. Furthermore, the water saved via drip irrigation has been used in further growth of irrigated lands instead of supporting the ecological system. This could lead to an increased risk of eco-environmental degradation and calls for improved governance schemes. The insights gained from this study can be potentially applied to other arid inland areas (e.g., central Asia) which face similar water shortages and human development problems.