Restoration and reconstruction of the degraded Tarim River ecosystem is an important challenge. A goal of an ecological water conveyance project is to protect and restore the natural vegetation in the lower reaches of Tarim River by transferring water from Bosten Lake, through the river channel, to the lower reaches. This study describes the changes in groundwater depth during the water transfer and the respondence of riparian vegetation to alterations in groundwater levels. The results indicate that groundwater depth along the Tarim River channel has a significant spatial-temporal component. Groundwater levels closest to the river channel show the most immediate and pronounced changes as a response to water transfer while those further away respond more slowly, although the observed change appears to be longer in duration. With a rise in the groundwater level, natural vegetation responded with higher growth rates, biomass and biodiversity. These favorable changes show that it is feasible to protect and restore the degraded natural vegetation by raising the groundwater depth. Plant communities are likely to reflect the hysteresis phenomenon, requiring higher water levels to initiate and stimulate desired growth than what may be needed to maintain the plant community. Because different species have different ecologies, including different root depths and densities and water needs, their response to increasing water availability will be spatially and temporally heterogenous. The response of vegetation is also influenced by microtopography and watering style. This paper discusses strategies for the protection and restoration of the degraded vegetation in the lower reaches of the Tarim River and provides information to complement ongoing theoretical research into ecological restoration in arid or semi-arid ecosystems.