Within the NEESPI region, this study focuses on the reciprocal effects of the changes in land use and the energy/water balance in Inner Mongolia where steppe dominated ecosystems are rapidly transformed into pastureland, agricultural fields, and urbanized areas. As a consequence, severe and frequent catastrophes (e.g., dust storms) have been increasing in recent decades. We combine remote sensing products, modeling, and ground-intensive measurements of climate, carbon and water fluxes through multiple eddy covariance towers, vegetation, and soil in order to understand how LCLUC affects the region. Major lessons learned so far include: • The spatial distributions of water and production (MODIS) were closely related to plant species diversity at local and regional scales. • Significant increases in the air temperature since 1952 have been observed, with the increases varying significantly and being nonparallel among ecosystems. • Counties dominated by cropland have exhibited greater water use than those dominated by grassland. The annual change in the land surface water index • (LSWI) was also significantly greater for districts with dry-land irrigated agriculture. Soil moisture from AMSR-E is dependent on the LULC type, with soil moisture increases with vegetation cover. • Both cultivation and extensive grazing of grasslands had caused changes in canopy surface conductance, soil water holding capacity and soil moisture, which, in turn, decreased the growing season evapotranspiration (ET) by 7-15%. • Seasonal changes in net radiation, latent heat, sensible heat, and soil heat remained similar at cultivated, overgrazed and natural steppe ecosystems, however, large decreases in stomatal conductance (gc) occurred under intensified land use and consequently reduced ET. The reductions in gc, ET, and the decoupling factor suggest an increased sensitivity to drought. • Large-scale poplar plantations had significantly increased ET, which would deplete groundwater levels and increase drought stress in the area. The team is making a significant effort to move the study forward by including feedback between natural and human systems under the changing climate.