We conducted combined measurements of soil water balance and surface energy fluxes at four sites within the Mongolian steppe region during the summer of 2001 to investigate the present state of the soil hydrological cycle, surface energy balance, and the role of vegetation in those processes. The summer total precipitation comprised 71-91% of the annual total (= 100}6 mm) at the sites, and was approximately equal to summer total evapotranspiration. Moreover, the net infiltration flux was always balanced by changes in water storage within the uppermost 20 cm of the soil layer, suggesting that very little percolation occurs to depths in excess of 20 cm. The mean residence time of water stored within the layer is estimated to range from 20 to 25 days during summer. We observed a strong linear relationship (correlation coefficients ranging from 0.72 to 0.85) between latent heat flux (lE) and water content at 3 cm depth (?3). The ratio of the lE change to the ?3 change increases with increasing vegetation cover. This fact indicates that steppe vegetation helps to drive the observed rapid water cycle, and controls the surface energy balance via a strong constraint on lE.