Water use efficiency (WUE, the ratio of gross primary productivity (GPP) to evapotranspiration (ET)) reflects the coupled relationship between water loss and carbon gain in the process of plant photosynthetic carbon assimilation. As a dominant tree species in arid area, Populus euphratica plays an important ecological role in slowing desertification. Here, continuous observations of carbon, water and energy fluxes were carried out in Populus euphratica forest with eddy covariance (EC) technique in 2018. We systematically explained the variation characteristics of energy fluxes and WUE at different time scales, and explored the main controlling factors of WUE in drought-stressed environment based on the synchronous meteorological data. Results showed that the carbon exchange of the Populus euphratica forest ecosystem occurred mainly during the growing seasons (April–October). During this period, the entire ecosystem appeared as a carbon sink with the potential to sequester atmospheric carbon dioxide. The average daily WUE was 2.2 g C/kg H2O, which was lower than other temperate forests (2.57–6.07 g C/kg H2O) but higher than grassland, wetland and cropland. We also concluded that an increase in carbon dioxide concentration (CCO2) and air relative humidity (RH) could promote the increase of WUE. Nevertheless, WUE was negatively correlated with air temperature (Ta), photosynthetically active radiation (PAR), and normalized difference vegetation index (NDVI). Additionally, WUE increased under moderate soil water content (SWC), but decreased due to the continuously rising SWC. WUE was more strongly affected by factors affecting water consumption than carbon uptake. Under the conditions of high temperature, strong radiation and low humidity in the summer, the growth rate of ET was much larger than that of GPP. This study not only contributes to our understanding of the carbon, water and energy dynamics of the Populus euphratica forest ecosystem but also provides an important reference for ecological conservation and ecological restoration in arid regions.