Salix psammophila and Caragana korshinskii are two common shrubs in the southern Mu Us Desert, China. Their hydraulic strategies for adapting to this harsh, dry desert environment are not yet clear. This study examined the hydraulic transport efficiency, vulnerability to cavitation, and daily embolism refilling in the leaves and stems of these two shrubs during the dry season. In order to gain insight into water use strategies of whole plants, other related traits were also considered, including daily changes in stomatal conductance, leaf mass per area, leaf pressure-volume parameters, wood density and the Huber value. The leaves and stems of S. psammophila had greater hydraulic efficiency, but were more vulnerable to drought-induced hydraulic dysfunction than C. korshinskii. The difference between leaf and stem water potential at 50 % loss of conductivity was 0.12 MPa for S. psammophila and 0.81 MPa for C. korshinskii. Midday stomatal conductance decreased by 74 % compared to that at 8:30 in S. psammophila, whereas no change occurred in C. korshinskii. Daily embolism and refilling occurred in the stems of S. psammophila and leaves of C. korshinskii. These results suggest that a stricter stomatal regulation, daily embolism repair in stems, and a higher stem water capacitance could be partially compensating for the greater susceptibility to xylem embolism in S. psammophila, whereas higher leaf elastic modulus, greater embolism resistance in stems, larger difference between leaf and stem hydraulic safety, and drought-induced leaf shedding in C. korshinskii were largely responsible for its more extensive distribution in arid and desert steppes.