Many fundamental ecosystem properties and dynamics are monitored by plant water status, particularly in arid ecosystem where water is usually limiting. Although plant water status have been widely assessed using field measurements by ecological methods, approaches for remotely sensing plant water status are largely lacking, particularly diurnal water status. In arid ecosystem, WUE is a dynamic indicator for detecting water status, but also an integrated index for correlating to the plant photosynthesis. In our study, the experiments were conducted on native dominant desert shrub, Tamarix ramosissima, in their original habitats on the southern periphery of Gurbantonggut desert, China. We explored sensitive and useful hyperspectral indices for estimating diurnal WUE at a leaf scale based on diurnal measurements of hyperspectral reflectance, photosynthesis and micrometeorological variables. According to the statistical analysis of relationships between spectral indices and WUE estimation, SR type hyperspectral index is the sensitivity index for WUE estimation. Our results provide useful insights for monitoring desert shrubs diurnal and dynamic water status, using a wide range of available hyperspectral data.