Between July 2002 and June 2004 we recorded many ecohydrological observations at a sparse grassland site on the southern periphery of the Eurasian cryosphere in Mongolia. Grass growth at the study site shows significant difference of biomass between drier and moister years. Seasonal change of PAR albedo is a good indicator of temporal change of biomass. The stresses of atmosphere and soil water to grass have been evaluated at the study site using index of air temperature stress degree-day (SDD) and soil water stress (SWS). SDD was small and prevailingly negative. Variations in the SWS tracked precipitation fluctuations. Variability of two indexes may imply that atmospheric heat stress for the growing grass was weak compared to soil water stress for such a semiarid region. The above conclusion is supported by irrigation experimental observation as well; clear differences of biomass were observed between watered and unwatered ground after irrigation commenced. Soil evaporation and transpiration were estimated using a soil moisture parameterization and verified with micro-Lysimeter observations. Variability of evapotranspiration shows temporal decline processes' response to precipitation events or snow melting. During the observation period, evapotranspiration totaled 301.6 mm, and precipitation totaled 319.5 mm. The mean partition of transpiration in evapotranspiration was 22%, which was small during wetter grass-growing periods but large in drier periods. The growing period is short along the periphery of the cryosphere, but water fluxes during the growing period contribute significantly to the annual water cycle.