Dryland wetlands are resilient ecosystems that can adapt to extreme periodic drought-flood episodes. climate change projections show increased drought severity in drylands that could compromise wetland resilience and reduce important habitat services. These recognized risks have been difficult to evaluate due to our limited capacity to establish comprehensive relationships between flood-drought episodes and vegetation responses at the relevant spatiotemporal scales. We address this issue by integrating detailed spatiotemporal flood-drought simulations with remotely sensed vegetation responses to water regimes in a dryland wetland known for its highly variable inundation. We show that a combination of drought tolerance and dormancy strategies allow wetland vegetation to recover after droughts and recolonize areas invaded by terrestrial species. However, climate change scenarios show widespread degradation during drought and limited recovery after floods. Importantly, the combination of degradation extent and increase in drought duration is critical for the habitat services wetland systems provide for waterbirds and fish. Dryland biomes comprise almost 50% of Earth's land surface and substantially contribute to global biodiversity and carbon sequestration 1. In these environments, dryland wetlands are of key importance for regional biodiversity as they serve as habitat sanctuaries for aquatic and terrestrial biota in areas with very few resources 2,3. Periodical flooding events regulate the ecological diversity of the system 4 as flows deliver water, sediment, and associated nutrients to the floodplain 5 , allow fish and invertebrates to reach floodplain environments or distant waterholes 6 , and trigger breeding of waterbirds 3,7 and fish 8. During droughts, wetlands show resilience to limited water availability due to plant species either being drought-tolerant or able to re-establish when wet conditions return 9. Future global climate change patterns and interdecadal variability projections indicate that droughts will be longer in dryland areas because of potential changes in weather patterns 10 , which could lead to global decreases of wetland extent, vegetation deterioration, and decreases in habitat services. Although these are recognized risks of pronounced interdecadal variability and climate change, estimates of vegetation deterioration in dryland wetlands are still uncertain, often due to oversimplified representation of flood-drought episodes and the vegetation response to these events. Drylands around the world are expected to receive less rainfall over the next century, which will critically increase the pressure on dryland wetlands, as they will compete for water with irrigation and human and livestock consumption 10,11. Climate variability will add to this pressure, with anomalies in weather patterns such as El Niño Southern Oscillation (ENSO) and the Interdecadal Pacific Oscillation (IPO) expected to become stronger in the future 12,13 , extending droughts 10 and reducing vegetation productivity 14....