Nitrogen limits leaf gas exchange, canopy development, and evapotranspiration in many ecosystems. In dryland ecosystems, it is unclear whether increased anthropogenic nitrogen inputs alter the widely recognized dominance of water and energy constraints on ecohydrology. We use observations from a factorial irrigation and fertilization experiment in a nitrogen-limited southern California annual grassland to explore this hypothesis. Our analysis shows growing season soil moisture and canopy-scale water vapor conductance are equivalent in control and fertilized plots. This consistency arises as fertilization-induced increases in leaf area index (LAI) are offset by reduced leaf area-based stomatal conductance,gs. We interpret this as evidence of a hydraulic feedback between LAI, plant water status, and gs, not commonly implemented in evapotranspiration models. These results support the notion that canopy physiology and structure are coordinated in water-limited ecosystems to maintain a transpiration flux tightly controlled by hydraulic constraints in the soil-vegetation-atmosphere pathway.