Pan evaporation, as a surrogate of potential evaporation, is reported to have decreased in different regions of the world since the 1950s. There is much literature to explain the decrease in pan evaporation using the so-called evaporation complimentary relationship hypothesis and it is argued that pan evaporation can be understood as a sign of global warming and indication of an accelerating hydrologic cycle. On the other hand, some scientists insist that the pan evaporation trends may be caused by a global dimming, which effectively reduces the solar radiation to the ground surface. However, few reports are available about the changes in pan evaporation and their implications to water balance in arid regions. In the present study, we investigate the trends in pan evaporation in arid regions of China over the past 50 years and attempt to characterize the changes in water balance in these areas. It is found that pan evaporation in these areas has portrayed a statistically significant decreasing trend, which may be attributed mainly to decreases in wind speed and diurnal temperature range and increase in precipitation. The trends in some major meteorological factors such as pan evaporation, precipitation, temperature, wind speed and others imply an enhanced hydrological cycle in the study area. Copyright © 2009 John Wiley & Sons, Ltd.