Improved understanding of interactions among the atmosphere, soil water and groundwater can be achieved by observing time-series of soil-water content and water-table fluctuations in a soil profile. Field observations at a site in China show that from mid-June to mid-September, when evapotranspiration is strong, direct groundwater recharge does not occur, and variations in soil-water content in the shallow part of the unsaturated zone are mainly controlled by atmospheric conditions; however, in the deeper part they are controlled by the fluctuating water table. Therefore, a one-dimensional (1D) model with a variable-head lower boundary condition (BC) is built to interpret the responses of soil-water flow to changes in atmospheric and groundwater conditions, and a 1D model with a fixed-head lower BC corresponding to the mean water-table depth is built for comparison. The model with a variable-head lower BC reproduces the observed variations in soil-water content, and results in much smaller groundwater evapotranspiration than the compared model. Moreover, the model with a variable-head lower BC shows a two-sided damping of variations in the soil-water flux from the surface and from the bottom, thus producing a stable middle layer with limited variation in soil-water flux. The limited but stable upward flux in the middle layer indicates restriction of both the direct recharge and evapotranspiration of groundwater. Therefore, this study enhances understanding of interactions between the atmosphere and groundwater in arid regions, and also on the appropriate selection of the lower BC of 1D variably saturated flow models.