Terrestrial ecosystems are fully coupled with the climate. The planet has been greening owing to the increased vegetation growth in response to the changing atmosphere, which in turn has feedback on the climate. Greening has slowed down the rise in global land-surface air temperature mainly through a coincident increase of evapotranspiration and precipitation in wet regions. In dry regions, greening intensifies the decrease in soil moisture induced by greening-enhanced transpiration. Uncertain, however, is how the climate effects of greening in semi-arid lands might differ for variable wet and dry conditions. Here, we focus on the biosphere–atmosphere interactions in Australia by modeling the perturbation of vegetation changes under various states of sea surface temperature (SST), including the climatology mean, El Niño, and La Niña conditions. For the dry conditions of El Niño, greening exacerbates water stress and largely depletes the soil moisture, while for the wet conditions of La Niña, greening-enhanced evapotranspiration and precipitation resupply the soil moisture. For the normal conditions using the climatology mean SST, a small decrease in soil moisture occurs but with large spatial contrast because of heterogeneous changes of evapotranspiration and precipitation induced by greening. We emphasize that the alternating dry and wet conditions modulated by the large-scale climate variability are vital to understanding the response of climate to greening. Furthermore, vegetation-based warming mitigation policies need to be cautious when inferring distinct climate effects associated with greening.