Abstract It remains unclear how changes in moisture supply drive droughts in the Agro‐Pastoral Ecotone of Northern China (APENC), where ecological restoration and food security are increasingly vulnerable under warming. Using a moisture‐tracking model, we quantify the moisture sources of APENC’s precipitation and its trends, and reveal mechanisms linking anomalous upwind moisture transport to droughts. Terrestrial moisture sources (67.60%) dominate APENC’s precipitation. Over 2000–2023, moisture sources from high‐latitude Eurasia and the Tibetan Plateau have increased, whereas those from oceanic sources have decreased significantly. During recent drought events, reductions in moisture inflow from key terrestrial source regions, especially East Asia and the South Asia–Indian Ocean region, primarily triggered rainfall deficits in the APENC. The combination of weakened moisture inflows and reduced local humidity amplified moisture scarcity, sustaining drought severity. These findings highlight the coupled roles of remote transport and land–atmosphere feedbacks in APENC droughts, providing new evidence for understanding semi‐arid hydroclimate risks.