Arid and semi-arid areas are facing serious water challenges, yet a comprehensive understanding of current and future water supply–demand dynamics remains limited, particularly under climate change and intensified human activities. Based on InVEST and statistical models that include various human activities, we analyzed the patterns and variations of water supply and demand on the Mongolian Plateau for the present period (2001–2020) and projected future (2021–2100). The results showed that grasslands and forests were the primary sources of water supply (77.4%), and cropland was the dominant source of water demand (97.5%), the annual water supply and demand were 238.7 m³/hm² per year and 546.7 m³/hm² per year, respectively. From 2001 to 2020, water supply increased by 9.6 m³/hm² per year (p < 0.01), whereas water demand decreased by 10.5 m³/hm² per year (p < 0.05). The proportion of areas exhibiting a water surplus increased from 31.5% in 2001 to 51.5% in 2020, primarily due to increased precipitation and a reduction in irrigation water demand. By the end of the 21st century, water supply is projected to increase across all scenarios, ranging from 20.3% to 30.1%, while demand trends diverge: it declines by 28.9%–33.3% under SSP1-2.6, SSP3-7.0, and SSP5-8.5, but rebounds to near-baseline levels under SSP2-4.5. Consequently, water security may improve under SSP1-2.6 and SSP5-8.5 but may deteriorate under SSP2-4.5 and SSP3-7.0. We propose region-specific management strategies, including forest conservation, rotational grazing, irrigation optimization, and inter-basin water allocation. The spatially explicit data and findings provide a valuable foundation for transboundary water cooperation and sustainable dryland water management under a warming climate.