The dry-wet transition is of great importance for vegetation dynamics, however the response mechanism of vegetation variations is still unclear due to the complicated effects of climate change. As a critical ecologically fragile area located in the southeast Qinghai-Tibet Plateau, the Yarlung Zangbo River (YZR) basin, which was selected as the typical area in this study, is significantly sensitive and vulnerable to climate change. The standardized precipitation evapotranspiration index (SPEI) and the normalized difference vegetation index (NDVI) based on the GLDAS-NOAH products and the GIMMS-NDVI remote sensing data from 1982 to 2015 were employed to investigate the spatio-temporal characteristics of the dry-wet regime and the vegetation dynamic responses. The results showed that: (1) The spatio-temporal patterns of the precipitation and temperature simulated by the GLDAS-NOAH fitted well with those of the in-situ data. (2) During the period of 1982–2015, the whole YZR basin exhibited an overall wetting tendency. However, the spatio-temporal characteristics of the dry-wet regime exhibited a reversal phenomenon before and after 2000, which was jointly identified by the SPEI and runoff. That is, the YZR basin showed a wetting trend before 2000 and a drying trend after 2000; the arid areas in the basin showed a tendency of wetting whereas the humid areas exhibited a trend of drying. (3) The region where NDVI was positively correlated with SPEI accounted for approximately 70% of the basin area, demonstrating a similar spatio-temporal reversal phenomenon of the vegetation around 2000, indicating that the dry-wet condition is of great importance for the evolution of vegetation. (4) The SPEI showed a much more significant positive correlation with the soil water content which accounted for more than 95% of the basin area, implying that the soil water content was an important indicator to identify the dry-wet transition in the YZR basin.