Vegetation changes, particularly transitions between tree- and grass-dominated states, can alter ecosystem water balances and soluble salt fluxes. Here we outline a general predictive framework for understanding salinization of afforested grasslands based on biophysical, hydrologic, and edaphic factors. We tested this framework in 20 paired grassland and adjacent afforested plots across ten sites in the Argentine Pampas. Rapid salinization of groundwater and soils in afforested plots was associated with increased evapotranspiration and groundwater consumption by trees, with maximum salinization occurring on intermediately textured soils. Afforested plots (10–100 ha in size) showed 4–19-fold increases in groundwater salinity on silty upland soils but <twofold increases on clay loess soils and sand dunes. Two years of salinity and groundwater measurements at a 40 ha Eucalyptus camaldulensis plantation revealed that the plantation reduced groundwater recharge, underwent groundwater discharge on >50% of the days, and depressed the water table 38 cm on average compared to the adjacent grassland. Soil cores and vertical electrical soundings indicated that ≈6 kg m−2 of salts accumulated close to the water table and suggested that salinization resulted from the exclusion of fresh groundwater solutes by tree roots. Groundwater use with afforestation in the Pampas and in other regions around the world can enhance primary production and provide a tool for flood control. However, our framework and experimental data also suggest that afforestation can compromise the quality of soils and water resources in predictable ways based on water use, climate, and soil texture.