Regime shifts from grasslands to shrublands in arid and semiarid ecosystems are thought to be irreversible, similar to state changes in other systems. We analyze long-term data from the Jornada Basin LTER site to determine if a directional change in climate provides an opportunity to reverse this conversion in the Chihuahuan Desert. We compare historical dynamics based on 140 years of landscape change (1858-1998) with 18 years (1990-2007) of detailed ecosystem responses under a variable climate to predict future responses under either a directional increase or decrease in rainfall. Our data show that a long-term decrease in rainfall will accelerate current desertification trends and continuing loss of productive and diverse grasslands. On the contrary, a multi-year increase in rainfall can act to convert degraded shrublands to savannas containing mixtures of shrubs and grasses, and potentially a return to grasslands in the future. Because this regime shift reversal is not predicted based on historical drivers, our assumptions about ecosystem dynamics in the face of global change need to be re-examined, and new strategies need to be developed to take advantage of opportunities provided by future climates.