Atmospheric water is among the most important water sources for plants in arid ecosystems and plays an important role in facilitating drought stress survival in plants. However, little is known about the specific physiological benefits of foliar water uptake (FWU) for woody plants inhabiting arid desert areas. The objective of this study was to explore the physiological responses of Calligonum mongolicum to atmospheric water uptake by the assimilating branches, with a special focus on the FWU effect on shoot water status and photosynthesis. To this end, the canopies of natural C. mongolicum plants in a desert region of northwestern China were humidified in a field in-situ misting experiment and a long-term wetting experiment, during which physiological measurements of plant water relations and photosynthetic capacity were performed, alongside the observation of FWU by H218O isotopic tracing. Following the in-situ misting experiment, the water potential of the assimilating branches was significantly higher than that of the secondary branches at midnight, suggesting that FWU resulted in a reverse water potential gradient in C. mongolicum at the branch level. The 18O isotope was markedly enriched in the assimilating branches, secondary branches, and trunk xylem following the foliar uptake of 18O labeled water, indicating that the water uptake from the atmosphere by the assimilating branches could replenish the stem. The relative water content and water potential of the assimilating branches were significantly increased by FWU. The net photosynthetic rate, stomatal conductance, and maximum photochemical efficiency of C. mongolicum plants were markedly increased following the wetting treatment. Our results clearly show that C. mongolicum is capable of FWU, and that the absorbed water could be transported downward through the xylem and improve the branch water status and photosynthetic capacity. These findings provide a new perspective for deepening our understanding of the drought survival mechanism of plants in arid environments.