In response to extreme societal consequences of ecosystem degradation and climate change, attention to ecological restoration is increasing globally. In China, investments in restoration exceeded USD 378.5 billion over the past decade. However, restoration programs are experiments that can cause marked unintended consequences, with trade-offs across space and time that have undergone little empirical examination. We quantified the long-term effects of large-scale afforestation for soil erosion and sandstorm prevention in semiarid China. We found that soil erosion was notably reduced by afforestation but surface runoff declined significantly, after a time lag of 18 years, limiting overall benefit. While forest area also increased, forest quality declined, interacting with reduced surface water runoff. Crucially, increased forest water consumption accelerated downstream groundwater depletion, thus intensifying conflicts over water use. The time lags and spatial trade-offs revealed by this case study provide critical lessons for large-scale restoration programs globally.