The invasive tree, Tamarix sp., was introduced to the United States in the 1800s to stabilize stream banks. The riparian ecosystem adjacent to the middle Rio Grande River in central New Mexico consists of mature cottonwood (Populus fremontii) gallery forests with a dense Tamarix understory. We hypothesized that Populus would compensate for reduced competition by increasing its water consumption in restored riparian plots following selective Tamarix removal, resulting in similar transpiration (T) among stands. The northern study site included a Populus stand invaded by Tamarix (INVN) and a restored Populus-only stand (RESN), as did a southern site (INVS and RESS) approximately 80 miles south. At each site, 20 × 20–m plots were established where up to 16 stems were monitored throughout the 2004 growing season using thermal dissipation sapflow sensors. Populus sapflux rates were greater in restored stands, suggesting those trees compensated for understory removal by using more water. Sapflow was scaled to estimate stand-level T based on a quantitative assessment of sapwood basal area (Asw) by species. Although exotic species represented 85 and 91% of the total stems in the invaded stands, it amounted to only 3% (INVS) and 4% (INVN) of the total Asw, contributing proportionately less to T compared to Populus. Our results indicate that removing Tamarix from the Populus understory in this riparian forest had a minimal impact on stand water balance. Riparian restoration of the type discussed herein should focus primarily on enhancing riparian health rather than generating water.