Global climate change influences not only vascular plants, but also biological soil crusts (biocrusts), which play important roles in dryland vegetation dynamics by redistributing rainfall in soils. Different types of biocrusts, spanning a spectrum from cyanobacteria-dominated and moss-dominated, have distinct roles in rainfall redistribution patterns, but the ecohydrological effects of different biocrust types on dryland ecosystem dynamics remain largely unclear. This study developed an ecohydrological model with biocrust as a system state variable to explicitly explore the effects of different biocrust types on dryland vegetation dynamics in Shapotou region in northern China, particularly after restoration. The results indicated that both cyanobacteria- and moss-dominated biocrusts could support high grass cover (approximately 40%) after restoration. Cyanobacterial, but not moss biocrusts, could also maintain a high level of shrub cover (13 and 3%, respectively). Shifting from cyanobacteria to mosses gradually increased the biocrust cover from approximately 40% to 80%. The biocrust's water-holding capacity (the volume of water it can intercept per unit area) is likely be able to explain the dynamics of biocrust and shrub cover (with correlation efficiency of R2 = 0.972 and 0.987, respectively), but not grass cover (R2 = 0.224). The findings suggest that biocrust type may significantly affect coverage of biocrusts and shrubs, but not grass coverage, and global climate change may influence dryland restoration by altering biocrust types.