Scientists and the local government have great concerns about the climate change and water resources in the Badain Jaran Desert of western China. A field study for the local water cycle of a lake-desert system was conducted near the Noertu Lake in the Badain Jaran Desert from 21 June to 26 August 2008. An underground wet sand layer was observed at a depth of 20–50 cm through analysis of datasets collected during the field experiment. Measurements unveiled that the near surface air humidity increased in the nighttime. The sensible and latent heat fluxes were equivalent at a site about 50 m away from the Noertu Lake during the daytime, with mean values of 134.4 and 105.9 W/m2 respectively. The sensible heat flux was dominant at a site about 500 m away from the Noertu Lake, with a mean of 187.7 W/m2, and a mean latent heat flux of only 26.7 W/m2. There were no apparent differences for the land surface energy budget at the two sites during the night time. The latent heat flux was always negative with a mean value of –12.7 W/m2, and the sensible heat flux was either positive or negative with a mean value of 5.10 W/m2. A portion of the local precipitation was evaporated into the air and the top-layer of sand dried quickly after every rainfall event, while another portion seeped deep and was trapped by the underground wet sand layer, and supplied water for surface psammophyte growth. With an increase of air humidity and the occurrence of negative latent heat flux or water vapor condensation around the Noertu Lake during the nighttime, we postulated that the vapor was transported and condensed at the lakeward sand surface, and provided supplemental underground sand pore water. There were links between the local water cycle, underground wet sand layer, psammophyte growth and landscape evolution of the mega-dunes surrounding the lakes in the Badain Jaran Desert of western China. Scientists and the local government have great concerns about the climate change and water resources in the Badain Jaran Desert of western China. A field study for the local water cycle of a lake-desert system was conducted near the Noertu Lake in the Badain Jaran Desert from 21 June to 26 August 2008. An underground wet sand layer was observed at a depth of 20-50 cm through analysis of datasets collected during the field experiment. Measurements unveiled that the near surface air humidity increased in the nighttime. The sensible and latent heat fluxes were equivalent at a site about 50 m away from the Noertu Lake during the daytime, with the mean values ​​of 134.4 and 105.9 W / m2 respectively. The sensible heat flux was dominant at a site about 500 m away from the Noertu Lake, with a mean of 187.7 W / m2, and a mean latent heat flux of only 26.7 W / m2. There were no apparent differences for the land surface energy budget at the two sites during the night time. The latent heat flux was always negative with a mean value of -12.7 W / m2, and the sensible heat flux was either positive or negative with a mean value of 5.10 W / m2. A portion of the local precipitation was evaporated into the air and the top-layer of sand dried anterior after every rainfall event, while another portion seeped deep and was trapped by the underground wet sand layer, and supplied water for surface psammophyte growth. With an increase of air humidity and the occurrence of negative latent heat flux or water vapor condensation around the There are links between the local water cycle, underground wet sand layer, psammophyte growth and landscape evolution of the mega-dunes surrounding the lakes in the Badain Jaran Desert of western China.