Groundwater, as the limiting resource in arid ecosystems, can have profound effects on the functional structure and distribution of plant communities. However, studies are too few to unveil the impacts of groundwater depth on plant functional traits in such communities. We collected data on vegetation, topography and soil properties from 180 quadrats (60 trees/shrubs and 120 herbaceous) in the desert-wetland ecosystem of Shule River Basin in Northwest China. We measured 10 key communitylevel functional traits, together with the resource topography (i.e., groundwater depth) and seven soil properties. We found that the increase of groundwater depth significantly reduced community-level specific leaf area and maximum leaf photosynthesis rate, while boosted leaf dry mass content and leaf thickness. However, the leaf phosphorus content remained relatively stable. By contrast, with the increase of groundwater depth, soil carbon, soil nitrogen, soil phosphorus and total dissolved salts first increased but then declined, while soil pH and soil bulk density exhibited the opposite trend. The soil moisture content decreased drastically with the decline of groundwater. The change in groundwater depth, thus, was found the main driver of species distribution in the arid zone, contributing 21.16%, followed by soil K + (9.94%) and soil total nitrogen content (4.9%), as well as a strong interaction of the three (41.7%). Changes in groundwater depth can thus alter the structure and nutrient enrichment of the soil, which in turn affects the distribution of vegetation through water-soil-plant interactions.