Technical Abstract: This study investigates how drought-induced change in semiarid grassland community composition affected runoff and sediment yield in a small 1.8 ha watershed in southeast Arizona, USA. Three distinct periods in ecosystem composition and associated runoff and sediment yield were identified according to dominant species: native bunchgrass (1974-2005), forbs (2006), and the invasive grass, Eragrostis lehmanniana (2007-2009). Precipitation, runoff, and sediment yield for each period were analyzed and compared, utilizing multi-year data sets measured at watershed and plot scales. Due to decline in plant canopy cover, watershed hydrological response to precipitation during the transition period of 2006 was very different from those the hydrological responses during any other period despite similarities in precipitation volumes and frequency. Average watershed annual sediment yield was 0.16 t ha-1 y-1, with 0.06 t ha-1 y-1 under native bunchgrasses, increasing to 1.64 t ha-1 y-1 during the 2006 forb-dominated transition, then back to 0.06 t ha-1 y-1 under E. lehmanniana. While slopes of the sediment yield-runoff regression model increased six-fold during the transition period compared to the 1974-2005 native bunchgrass period, regression slopes for native bunchgrass and E. lehmanniana dominated periods did not differ. In contrast, regression models from hillslope runoff data showed runoff rate and sediment discharge increased significantly after E. lehmanniana replaced native grasses. Together, these findings suggest altered plant community structure increased runoff and sediment yield, but that hydrological responses differ at watershed and plot scales, highlighting the geomorphological controls at the watershed scale that determine sediment transport efficiency and storage. Resolving these scalar issues will help identify critical landform features needed to preserve rangeland integrity under changing climate conditions.