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Increases in the abundance or density of woody plants in historically semiarid and arid grassland ecosystems have important ecological, hydrological, and socioeconomic implications. Using a simplified water-balance model, we propose a framework for conceptualizing how woody plant encroachment is likely to affect components of the water cycle within these ecosystems. We focus in particular on streamflow and the partitioning of evapotranspiration into evaporation and transpiration. On the basis of this framework, we suggest that streamflow and evaporation processes are affected by woody plant encroachment in different ways, depending on the degree and seasonality of aridity and the availability of subsurface water....