Prosopis tamarugo Phil. is a legume tree native to the Atacama Desert, Chile. Tamarugo has physiological characteristics that are highly adapted to extreme life conditions in the Pampa del Tamarugal. Null precipitation makes tamarugo completely dependent on groundwater, developing in areas where the groundwater depth is closest to the surface. Groundwater extraction for domestic consumption, mining, and agriculture affects the desert ecosystem by lowering the water table. Measuring and describing the impacts on vegetation through the monitoring of physiological variables along with groundwater depletion in salt flats where extraction wells are located has contributed to a better understanding of tamarugo response to this stress factor. Integrated variables such as green canopy fraction, normalized difference vegetation index (NDVI),18O isotope enrichment in foliar tissue, and twig growth proved to be far more reactive toward groundwater depth increase and presented lower error values. These variables respond to mechanisms that tamarugo has to maintain a stable water condition when water offer (water table depth (WTD)) decreases regarding water demand (transpiration). Defoliation along with twig growth diminishment would combine toward a canopy reduction strategy in order to reduce water demand. Green biomass loss, beyond a certain WTD, would lead to complete drying of the tamarugo. Up to 10 m of groundwater table depth, Tamarugo grows, has photosynthetic activity, and has the ability to perform pulvinary movements. Beyond 20 m of water table depth, tamarugo survival is compromised and hydraulic failure is inferred to occur. The current scenario is of groundwater over-exploitation; if economic efforts will be made to conserve and/or restore tamarugo, habitat groundwater extraction is a key element in effective management. Reaching of the thresholds depends on the adequate authority management of groundwater. The objectives of this review are (a) to review information collected from scientific studies regarding tamarugo condition and its response, over time, to WTD increase, (b) to identify WTD thresholds that affect tamarugo's functioning, and (c) to propose a sequence of physiological events triggered by groundwater (GW) depletion.