Aims Soil water balance, key for ecosystem processes, is determined by multiple factors, including precipitation, temperature, slope and vegetation. How these interact with climate change and the relevant time scale of the interactions are poorly understood. We investigated the interplay among climate change, local abiotic conditions (slope) and biotic factors (vegetation or not) on soil water balance in a steppe grassland on the south exposure of a northern Mongolia valley. Methods We manipulated climate using passive warming open top chambers (OTCs), similar to those used in other systems. Areas of bare ground were created inside the OTCs to explicitly evaluate the effect of vegetation on soil moisture and its dynamics. The experiment was set up at two topographic locations, a steep upper slope and a gentle lower slope. Volumetric soil moisture content was measured throughout each growing season in a small area where vegetation had been removed and where it was left intact both inside OTCs and in control plots. To account for OTCs intercepting some precipitation, we also examined treatment effects on soil drying rates. Results Vegetation and climate manipulation reduced soil moisture more strongly in the wetter of the two years and just after rains. Similarly, treatment effects were more pronounced on the wetter lower slope. Averaged across the growing season, climate manipulation did not affect soil water differentially in vegetated and unvegetated areas, but seasonal variation in the strengths of treatment effects and interactions between climate and vegetation reflected plant developmental phenology. Soil drying rate was faster on the drier upper slope or with vegetation and faster overall in the drier year. In the dry year 2010, soil drying was slower in OTCs, likely because of wind interception. Conclusions Monthly or seasonal averages of soil moisture would have provided poor information about the interplay among factors affecting soil water balance in this system. Our study illustrates the utility of experimentally examining the interaction between biotic and abiotic factors and considering relevant time scales when investigating the complex effects of climate change on ecosystem processes.