Riparian woodlands occupy a small area of global drylands but are hotspots for carbon and water cycling because groundwater supplements a small moisture supply from precipitation (P). Despite their regional importance, it is unclear if and how climate variability alters water vapor and carbon dioxide (CO2) fluxes in these ecosystems, and how ecosystem drivers vary across annual and seasonal scales. Here we use 21 years of eddy covariance measurements to understand land-atmosphere controls on water vapor and CO2 fluxes of a semiarid riparian mesquite (Prosopis velutina) woodland with year-round access to deep groundwater and highly variable summer and winter rainfall. Access to groundwater supplemented evapotranspiration (ET) that exceeded precipitation (ET:P range 1.9–5.4), making this riparian forest a substantial CO2 sink (367 ± 83 g C m-2yr-1). Contrary to general expectations of regional climatic drying, there was a shift to more favorable water conditions as P and soil moisture increased over time. Annual gross ecosystem production (GEP) and respiration (Reco) increased at the same rate (∼9 g C m-2yr-2) due to GEP and Reco increases during the wettest periods of the year. Growth year separation based on GEP phenology and regression models show that water availability and antecedent phenophase fluxes control seasonal ET and GEP, with CO2 fertilization detected only during winter dormancy, the least-active phenophase. The major Reco driver during the spring and summer was GEP, and this coupling intensified following the onset of summer rainfall. Groundwater subsidies support ET during the dry growing season and decouple water vapor and CO2 fluxes. These results highlight the dynamic nature of water vapor and CO2 cycling in semiarid riparian woodlands, the value of groundwater subsidies to buffering ecosystem responses from the interannual effects of climate variability, and the importance of two water sources in driving seasonal ecosystem responses.