In the middle-to-late Holocene, Earth’s monsoonal regions experienced catastrophic precipitation decreases that produced green to desert state shifts. Resulting hydrologic regime change negatively impacted water availability and Neolithic cultures. Whereas mid-Holocene drying is commonly attributed to slow insolation reduction and subsequent nonlinear vegetation–atmosphere feedbacks that produce threshold conditions, evidence of trigger events initiating state switching has remained elusive. Here we document a threshold event ca. 4,200 years ago in the Hunshandake Sandy Lands of Inner Mongolia, northern China, associated with groundwater capture by the Xilamulun River. This process initiated a sudden and irreversible region-wide hydrologic event that exacerbated the desertification of the Hunshandake, resulting in post-Humid Period mass migration of northern China’s Neolithic cultures. The Hunshandake remains arid and is unlikely, even with massive rehabilitation efforts, to revert back to green conditions.