Abstract Low soil moisture and high vapour pressure deficit (VPD) cause plant water stress and lead to a variety of drought responses, including a reduction in transpiration and photosynthesis1,2. When soils dry below critical soil moisture thresholds, ecosystems transition from energy to water limitation as stomata close to alleviate water stress3,4. However, the mechanisms behind these thresholds remain poorly defined at the ecosystem scale. Here, by analysing observations of critical soil moisture thresholds globally, we show the prominent role of soil texture in modulating the onset of ecosystem water limitation through the soil hydraulic conductivity curve, whose steepness increases with sand fraction. This clarifies how ecosystem sensitivity to VPD versus soil moisture is shaped by soil texture, with ecosystems in sandy soils being relatively more sensitive to soil drying, whereas ecosystems in clayey soils are relatively more sensitive to VPD. For the same reason, plants in sandy soils have limited potential to adjust to water limitations, which has an impact on how climate change affects terrestrial ecosystems. In summary, although vegetation–atmosphere exchanges are driven by atmospheric conditions and mediated by plant adjustments, their fate is ultimately dependent on the soil.