Multiyear periods (≥4 y) of extreme rainfall are increasing in frequency as climate continues to change, yet there is little understanding how rainfall amount and heterogeneity in biophysical properties affect state changes in a sequence of wet and dry periods. Our objective was to examine the importance of rainfall periods, their legacies, and vegetation and soil properties to either the persistence of woody plants or a shift towards perennial grass dominance and a state reversal. We examined a 28‐y record of rainfall consisting of a sequence of multiyear periods (average, dry, wet, dry, average) for four ecosystem types in the Jornada Basin. We analyzed relationships between aboveground net primary production (ANPP) and rainfall for three plant functional groups that characterize alternative states (perennial grasses, other herbaceous plants, dominant shrubs). A multimodel comparison was used to determine the relative importance of rainfall, soil, and vegetation properties. For perennial grasses, the greatest mean ANPP in mesquite and tarbush dominated shrublands occurred in the wet period, and in the dry period following the wet period in grasslands. Legacy effects in grasslands were asymmetric, where the least production was found in a dry period following an average period, and the greatest production occurred in a dry period following a wet period. For other herbaceous plants, in contrast, the greatest ANPP occurred in the wet period. Mesquite was the only dominant shrub species with a significant positive response in the wet period. Rainfall amount was a poor predictor of ANPP for each functional group when data from all periods were combined. Initial initial herbaceous biomass at the plant scale, patch scale biomass, and soil texture at the landscape scale improved predictive relationships of ANPP compared with rainfall alone. Under future climate, perennial grass production is expected to benefit the most from wet periods compared with other functional groups with continued high grass production in subsequent dry periods that can shift (desertified) shrublands towards grasslands. The continued dominance by shrubs will depend on the effects that rainfall has on perennial grasses and the sequence of high and low rainfall periods rather than direct effects of rainfall on shrub production.This article is protected by copyright. All rights reserved.