The Euphrates river basin has been experiencing water stresses, caused by contrast of atmospheric demand-supply and human interventions. As a transboundary river basin, water shortages over the Euphrates may cause international tensions and conflicts. Here, we use the Noah-MP land surface model driven by the Global Land Data Assimilation System near-surface atmospheric forcing data to investigate the impacts of climatic variations on the negative TWS trend. Our model results indicate that climate variations explain 60% of the observed TWS declining trend over the Euphrates river basin. We attribute the residual trend (40%) to human interventions such as groundwater pumping, damming, and oil extraction activities. We disaggregate the effects of climate variations and found that climate variability is the dominant contributor to the decreasing trend of TWS. The climate variability affects TWS through a nonlinear response of monthly TWS change to varying aridity. Slow recovery of TWS during short wetting periods via precipitation is not able to compensate for quick depletion through evapotranspiration during long periods of drying events. Although the basin has experienced increasing water stress, plants show enhanced resistance, reflected by greater partitioning of evapotranspiration to transpiration, enhanced rain use efficiency, and vegetation greening supported by both observations and model simulations. Our research will provide useful insights into understanding ecohydrology and water management over dryland regions.