Abstract‘Urban Dry (Wet) Islands’ (UDI/UWI) represents microclimate change that impacts ecosystems and human well-being. However, causes of the UDI (UWI) phenomena are not fully understood due to the lack of empirical data. Here, we quantify UDI (UWI) using global observations of atmospheric humidity, evapotranspiration (ET), and land surface characteristics across 25 large urban agglomerations. We show that UDI (17) and UWI (8) are closely tied to local ET, global warming, and ‘Urban Heat Islands’ through intertwined linkages with water and energy balances. UDI is most pronounced in humid vegetated regions where mean urban-rural annual ET differences are as high as 215 mm, whereas UWI is found in arid regions or in climates with dry summers. We conclude that ET can be used as a single variable to explain emerging urban environmental changes. Our study supports a concerted strategy of restoring nature’s ET power as effective ‘Nature-based Solutions’ to mitigate the negative environmental effects of urbanization.