The impact of the intercropping system on the soil–plant–atmosphere continuum (SPAC), encompassing soil evaporation, soil moisture dynamics, and crop transpiration, remains an area of uncertainty. Field experiments were conducted for two years in conjunction with the SIMDualKc (Simulation Dual Crop Coefficient) model to simulate two planting configurations: sole-cropped wolfberry (Lycium barbarum L.) (D) and wolfberry intercropped with alfalfa (Medicago sativa L.) (J). These configurations were subjected to different irrigation levels: full irrigation (W1, 75–85% θfc), mild deficit irrigation (W2, 65–75% θfc), moderate deficit irrigation (W3, 55–65% θfc), and severe deficit irrigation (W4, 45–55% θfc). The findings revealed that the JW1 treatment reduced the annual average soil evaporation by 32% compared with that of DW1. Additionally, mild, moderate, and severe deficit irrigation reduced soil evaporation by 17, 24, and 36%, respectively, compared with full irrigation. The intercropping system exhibited a more efficient canopy structure, resulting in reduced soil evaporation and alleviation of water stress to a certain extent. In terms of temporal dynamics, monocropping resulted in soil moisture levels from 1% to 15% higher than intercropping, with the most significant differences manifesting in the mid to late stages, whereas differences in the early stages were not statistically significant. Spatially, the intercropping system exhibited 7–19% lower soil water contents (SWCs) than sole cropping, primarily within the root water uptake zone within the 0–60 cm soil layer. The intercropping system showed an enhanced water absorption capacity for plant transpiration, resulting in a 29% increase in transpiration compared with sole cropping, thereby achieving water-saving benefits. These findings contribute to our understanding of the agronomic and environmental implications of intercropping wolfberry and alfalfa in arid regions and provide insights into optimizing water and soil resource management for sustainable agricultural practices.
