In this paper, the cooling and freshwater generation performance of a novel hybrid configuration of a solid desiccant-based M-cycle cooling system (SDM) combined with a humidification–dehumidification (HDH) desalination unit is analysed and compared in three operational modes: ventilation, recirculation, and half recirculation. The HDH unit in this system recycles the moist waste air sourced from the M-cycle cooler and rotary desiccant wheel of the SDM system to enhance water production. A mathematical model was established and solved using TRNSYS and EES software. The results of this study indicate that the recirculation mode exhibited superior cooling performance compared to the other two modes, producing up to 7.91 kW of cooling load and maintaining a supply air temperature below 20.85 °C and humidity of 12.72 g/kg under various ambient conditions. All the operational modes showed similar water production rates of around 52.74 kg/h, 52.43 kg/h, and 52.14 kg/h for the recirculation, half-recirculation and ventilation modes, respectively, across a range of operating temperatures. The recirculation mode also exhibited a higher COP compared to the other modes, as the environmental temperature and relative humidity were above 35 °C and 50%. However, it should be noted that the implementation of the recirculation mode resulted in a higher water consumption rate, with a maximum value of 5.52 kg/h when the inlet air reached 45 °C, which partially offset the benefits of this mode.