Evapotranspiration, soil moisture balance and the dynamics in a gully catchment of the Loess Plateau in China were determined with 6 land use treatments including natural grassland, shrubs (Caragana microphylla), two woodlands (Prunus armeniaca var. ansu and Pinus tabulaeformis), cultivated fallow, and farmland (Triticum aestivum L.) in order to obtain a better understanding of soil moisture balance principles and to improve vegetation restoration efficiency for ecological rebuilding on the plateau. Average runoff from cultivated fallow was very high, reaching 10.3% of the seasonal rainfall. Evapotranspiration under T. aestivum was not significantly different from natural grasslands. Compared with natural grass, evapotranspiration was significantly greater (P ＜ 0.05) in 2002 and there was an increase in soil moisture depleted in the 1-3 m soil under P. armeniaca, P. tabulaeformis and C. microphylla. During the two years of the study the average soil moisture (0-100 cm soil profile) of T. aestivum was generally the highest, with P. armeniaca, P. tabulaeformis and C. microphylla usually the lowest. Thus, according to the soil moisture balance principle for this area the planned reforestation project was not ecologically reasonable. Reducing human disturbance and restoration with grass could be more effective.