Instrumented towers that continuously measure carbon, water and energy exchange between the land surface and atmosphere allow us to quantify long-term ecosystem-specific patterns in carbon storage, water use and energy balance. In addition to providing long term datasets that improve the ability of models to represent and predict ecosystem function, validate satellite products, and quantify the vital roles our ecosystems play, these datasets also provide a valuable opportunity to directly test ecological hypotheses at the ecosystem scale. Drylands cover 40% of the Earth’s land surface, support 35% of the human population and are changing rapidly due to drought, wildfire and insect outbreaks. We used a sixteen year record of carbon, water and energy fluxes, and associated micrometeorological parameters measured continuously in nine semi-arid biomes in the New Mexico Elevation Gradient (NMEG) to directly test ecological theory related to how and why ecosystem function in drylands respond to and recovers from: 1) climate variability, 2) drought-driven mortality and 3) fire. Because the NMEG covers drylands that include C4 dominated grassland, creosote shrubland, juniper savanna, pinyon juniper woodland, ponderosa pine woodland and mixed conifer forest, these results provide a better understanding of how flux tower datasets can be used in a hypothesis driven framework to both quantify and explain which drylands appear to be more resilient or vulnerable to changing climate and disturbance regimes. In addition, we will discuss how these results improve our efforts to understand and forecast how future climate will affect dryland function and the potential for dryland ecosystem transitions in southwestern landscapes in the coming decades.