Riparian and floodplain tree communities are often the dominant woodland assemblage in the arid zone and have high ecological value. The assessment of how groundwater or streamflow changes may affect riparian trees is hampered by two knowledge gaps: (i) water use requirements of these trees, and (ii) unconfined groundwater depth and salinity. Data on riparian tree (predominantly Eucalyptus coolabah) transpiration patterns were collected using sap flow loggers from a number of trees in the Neales and Finke River catchments of western Lake Eyre Basin, between May 2013 and March 2015, and related to streamflow events and groundwater conditions, where data were available. The mean annual evapotranspiration (ET) rates for trees with probable access to groundwater (i.e. water table within 5-8 m of the surface and salinity <20 g/L)  were in the range of 70-140 mm, compared to mean annual rainfall ranges of 140-220 mm. The E. coolabah responded to both rainfall and streamflow events but sap flow rates returned to background levels within 10-20 days of rainfall events while remaining elevated for two or more months following streamflow events. The results indicate that E. coolabah has root systems with the capacity to switch between shallow soil moisture stores (e.g. rainfall and streamflow infiltration) and deeper groundwater stores. The switching occurs immediately after rainfall/streamflow and higher transpiration rates will be sustained while the shallow soil moisture stores remain available. This flexible strategy enables E. coolabah to persist in riparian zones of ephemeral rivers with highly variable flow regimes.