Rainfall simulation at an average intensity of 124 mm.h-1 was used to compare infiltration and runoff on arid areas where subterranean termites had been eliminated four years prior to the initiation of the study (termite free) with adjacent areas populated by subterranean termites (termite present). Infiltration rates on termite free plots with less than 5% perennial plant cover were significantly lower 51.3+-6.8 mm.h-1 than rates on comparable termites present plots 88.4+-5.6 mm.h-1. On plots centered on Larrea tridentata shrubs, there were no differences in infiltration rates with or without termites. Plots with shrub cover had the highest infiltration rates 101+-6 mm.h-1. Highest runoff volumes were recorded from termite free <5% grass cover plots and the lowest from plots with shrubs. There were no differences in suspended sediment concentrations from termites present and termite free plots. Average bed load concentration was more than three times greater for termite free, <5% cover plots than from termite present, <5% cover plots. The reduction in infiltration, high runoff volumes and high bedloads from termite free areas without shrub cover is relatd to increased soil bulk density resulting from the collapse of subterranean galleries of the termites that provide avenues of bulk flow into the soil. Subterranean termites affect the hydrology of Chihuahuan desert systems by enhancing water infiltration and retention of top soil. The presence of a shrub canopy and litter layer cancels any effect of subterranean termites on hydrological parameters. Since approximately 2/3 of the area is not under shrub canopies, subterranean termites are considered to be essential for the maintenance of the soil water characteristics that support the present vegetation.