The reasons that clonal plants shift between sexual and clonal reproduction have persisted as a knowledge gap in ecological literature. We hypothesized that clonal plants’ shifts between sexual and clonal reproduction in different environments are driven by the relative costs of sexual and clonal reproduction. Moreover, we hypothesized plants prioritize sexual reproduction over clonal reproduction. To test these hypotheses, we determined the costs of sexual and clonal reproduction, and proportions of sexual and clonal reproduction of Caragana stenophylla along a climatic aridity gradient (semi-arid, arid, very arid and intensively arid zones) in the Inner Mongolia Steppe using several complementary field experiments. The cost of sexual reproduction increased while the cost of clonal reproduction decreased as climatic drought stress increased from the semi-arid to the intensively arid zones. The changes in the costs of these reproductive modes drove a shift in the reproductive mode of C. stenophylla from more sexual reproduction in the semi-arid zone to more clonal propagation in the intensively arid zone. However, because of the evolutionary advantages of sexual reproduction, sexual reproduction still held priority over clonal production in C. stenophylla, with the priority of sexual reproduction gradually increasing from the semi-arid to the intensively arid zones. Our study suggested that sexual reproduction has relatively high priority in propagation of C. stenophylla. However, if the costs of sexual reproduction are too high, C. stenophylla likely chooses clonal reproduction, and the ratio between sexual and clonal reproduction could be mediated by reproductive cost. These reproductive strategies reflect optimal resource utilization, and allow the persistence of both reproductive modes across stressful conditions depending on their evolutionary advantages.