Coastal dunes are valuable and complex ecosystems, meaning that predicting their response to anthropogenic pressure is challenging. A potential driver of complexity that links soil, water, and vegetation dynamics is soil water repellency (SWR). SWR is mainly caused by plant-derived hydrophobic compounds that are released during litter decomposition and leads to dry sandy soils resisting infiltration of precipitation. Until now, studies have focused on soil physical and chemical properties associated with SWR, but the potential of SWR generating soil watervegetation feedbacks that drive ecosystem dynamics is yet to be assessed. This study assessed the role of SWR on coastal dune ecosystem dynamics by combining field observations and laboratory experiments with theoretical ecological modeling that incorporated the empirically established relationships. We observed large differences in soil infiltration capacity in the field, and the laboratory experiments showed that soil hydrophobic compound concentrations and antecedent soil moisture conditions can explain these differences. Theoretical model analyses suggested that SWR can trigger cyclic vegetation dynamics, including long periods in which vegetation is absent. Water competitive plants with low-hydrophobic compound content (for example, woody species) exhibit stable temporal dynamics, whereas species with opposite traits (for example, grasses) are more likely to induce cyclic dynamics. For the latter species, SWR can amplify drought stress. In northwest Europe, this effect could become more important in coming decades due to the projected increases in drought severity. Our study explains how SWR may contribute to coastal dune ecosystem complexity, providing insights that may aid effective dune conservation and restoration.