A process-based approach to spatially distributed, overland-flow modelling is employed to assess the impact of water and nutrient redistribution at the landscape scale caused by short, high-intensity rainstorm events across grassland–shrubland vegetation boundaries of a semi-arid ecosystem in the south-western United States. The modelling scenarios showed that simulated fluxes from shrubland into grassland lead to a gain of water resources but to a loss of nutrient resources in the grassland areas close to the boundary. Simulated fluxes from grasslands into shrublands do not lead to a gain of water resources, but to an increase of nutrient resources for the shrubland areas close to the boundary. On the basis of the modelling results, a new hypothesis for the on-going desertification process in the southwestern United States is proposed. It is hypothesised that a vegetation boundary is stable when two conditions prevail to balance the lower resistance of grassland within the existing environmental setting with the higher resistance of shrubland: that the depletion of soil nutrients by the action of overland flow in the grassland zone close to the boundary is in balance with the replenishment rates of grassland by other nutrient cycling, and that the grassland gains enough water resources from the upslope shrublands. In contrast, a vegetation boundary potentially becomes unstable when the grassland acquires a competitive disadvantage towards shrubland regarding water benefit and nutrient depletion due to the combined effects of overland-flow dynamics and some external forces such as extensive overgrazing or climate change. The modelling results suggest that landscape linkages through the redistribution of water and soil resources across vegetation-transition zones at the landscape scale and feedback dynamics of overland-flow processes play a significant role in the persistence of land degradation in the US Southwest. © 2007 Elsevier B.V. All rights reserved.