To understand the coupled water and energy cycles in semiarid environments, we measured temporal fluctuations of evapotranspiration (ET) and identified key sources of the observed variability. Flux measurements are made using the Bowen ratio method, accompanied by measurements of soil moisture and radiation. We present data from semiarid grassland and shrubland sites, situated within 2 km of each other in New Mexico. The study includes three summer monsoon seasons. Midday available energy (Qa) is higher at the grassland than at the shrubland by 20% or 70 W m−2 because of differences in net radiation (Rn) and soil heat flux (G). At both sites, midday evaporative fraction and daily ET are strongly correlated with surface soil moisture (θ0–5cm) but poorly correlated with water content at greater depths or averaged throughout the entire root zone. The sensitivity of EF to θ0–5cm is 30% lower at the grassland site. The differences in Qa and EF cancel, yielding similar time series of ET at the two sites. Decreases in θ0–5cm, ET, and EF following rainfall events are rapid: exponential time constants are less than 3 days. With the exception of the largest storms, infiltration following rainfall events only wets the top 10 cm of soil. Therefore the surface soil layer is the primary reservoir for water storage and source for ET during the monsoon season, suggesting that direct evaporation is a large component of ET. Given these results, predicting ET based on root zone–averaged soil moisture is inappropriate in the semiarid environments studied here.