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Abstract Popular evapotranspiration (ET) partitioning methods make assumptions that might not be well‐suited to dryland ecosystems, such as high sensitivity of plant water‐use efficiency (WUE) to vapor pressure deficit (VPD). Our objectives were to (a) create an ET partitioning model that can produce fine‐scale estimates of transpiration (T) in drylands, and (b) use this approach to evaluate how climate controls T and WUE across ecosystem types and timescales along a dryland aridity gradient. We developed a novel, semi‐mechanistic ET partitioning method using a Bayesian approach that constrains abiotic evaporation using process‐based models, and loosely constrains time‐varying WUE within an autoregressive framework. We used this method to estimate daily T and weekly WUE across seven dryland ecosystem types and found that T dominates ET across the aridity gradient. Then, we applied cross‐wavelet coherence analysis to evaluate the temporal coherence between focal response variables (WUE and T/ET) and environmental variables. At yearly scales, we found that WUE at less arid, higher elevation sites was primarily limited by atmospheric moisture demand, and WUE at more arid, lower elevation sites was primarily limited by moisture supply. At sub‐yearly timescales, WUE and VPD were sporadically correlated. Hence, ecosystem‐scale dryland WUE is not always sensitive to changes in VPD at short timescales, despite this being a common assumption in many ET partitioning models. This new ET partitioning method can be used in dryland ecosystems to better understand how climate influences physically and biologically driven water fluxes.