Afforestation and deforestation as human disturbances to vegetation have profound impacts on ecohydrological processes influencing both water and carbon cycles and ecosystem sustainability. Since 1999, large‐scale revegetation activities such as “Grain‐to‐Green Program” have been implemented across China's Loess Plateau. However, negative ecohydrological consequences, including streamflow decline and soil drying have emerged. Here we estimate the equilibrium vegetation cover over the Loess Plateau based on an ecohydrological model and assess the water balance under the equilibrium and actual vegetation cover over the past decade. Results show that the current vegetation cover (0.48 on average) has already exceeded the climate‐defined equilibrium vegetation cover (0.43 on average) in many parts of the Loess Plateau, especially in the middle‐to‐east regions. This indicates a widespread overplanting, which is found to primarily responsible for soil drying in the area. Additionally, both the equilibrium vegetation cover and soil moisture tend to decrease under future (i.e., 2011–2050) climate scenarios due to declined atmospheric water supply (i.e., precipitation) and increased atmospheric water demand (i.e., potential evapotranspiration). Our findings suggest that further revegetation on the Loess Plateau should be applied with caution. To maintain a sustainable ecohydrological environment in the region, a revegetation threshold is urgently needed to guide future revegetation activities.