Deciphering the dominant controls on the connections between groundwater, surface water, and climate is critical to understanding water cycles in arid environments. Yet, persistent uncertainties in the fundamental hydrology of these systems remain. The growing demand for critical minerals such as lithium and associated water demands in the arid environments in which they often occur has amplified the urgency to address these uncertainties. We present an integrated hydrological analysis of the Dry Andes region utilizing a uniquely comprehensive set of tracer data (3H, 18O/2H) for these environments, paired directly with physical hydrological observations. We find two strongly decoupled hydrological systems that interact only under specific hydrogeological conditions where preferential conduits exist. The primary conditions creating these conduits are laterally extensive fine-grained evaporite and/or lacustrine units and perennial flowing streams connected with regional groundwater discharge sites. The efficient capture and transport of modern or “contemporary” water (weeks to years old) within these conduits is the primary control of the interplay between modern hydroclimate variations and groundwater aquifers in these environments. Modern waters account for a small portion of basin budgets but are critical to sustaining surface waters due to the existence of these conduits. As a result, surface waters near basin floors are disproportionally sensitive to short-term climate and anthropogenic perturbations. The framework we present describes a new understanding of the dominant controls on natural water cycles intrinsic to these arid high-elevation systems that will improve our ability to manage critical water resources.