Vegetation dynamics are very sensitive to climate change, especially in arid and semiarid regions. The Tarim River Basin, the largest and the most arid basin in northwest China, is a typically closed, independent, and self-balanced hydrological system. In this study, the Mann–Kendall trend test, partial correlation analysis, and gray relation analysis were used to investigate the vegetation dynamics and their response to hydroclimatic change in the Tarim River Basin from 1982 to 2006. The results indicated that vegetation vigour and coverage in the majority of the study area improved over the study period. However, vulnerable ecological regions including the margin of oases, the southeast of the Kunlun Mountains, and riparian zones were stressed by water shortage. Vegetation in these vulnerable zones tended to experience a decreasing trend, and water diversion was necessary to protect the important vulnerable ecological regions. The results of partial correlation analysis in space indicated that vegetation variation had a significantly positive correlation with mean annual temperature overall and a significantly positive correlation with local precipitation in most of the mountain regions. The results of gray relation analysis demonstrated that temperature was the main stress factor for mountain vegetation and runoff for oasis vegetation. Under the direct and indirect effects of temperature rise over the study period, vegetation vigour and coverage area have been improved because of more favourable hydroclimatic conditions. Copyright © 2012 John Wiley & Sons, Ltd.