Woody plant encroachment has profound impacts on the sustainable management of water resources in water-limited ecosystems. However, our understanding of the effects of this global phenomenon on groundwater recharge at local and regional scales is limited. Here, we reviewed studies related to (i) recharge estimation methods; (ii) mechanisms by which woody plants impact groundwater recharge; (iii) impacts of woody plant on recharge across different soil and geology; (iv) hydrological repercussions of woody plant removal; and (v) research gaps and needs for groundwater studies. We identified six different methods: water balance, water table, isotopes, chloride mass balance, electrical geophysical imaging, and modeling were used to study the impact of woody encroachment on groundwater. Woody plant encroachment could alter soil infiltration rates, soil water storage, transpiration, interception, and subsurface pathways to affect groundwater recharge. The impact is highly variable, with the extent and the magnitude varying across the soil, substrate, plant cover, and topographic locations. Our review revealed mixed effects of woody plant removal on groundwater recharge. Studies of litter interception, root water uptake, soil moisture dynamics, and deep percolation along with the progression of woody plant encroachment are still limited, warranting further experimental studies focusing on groundwater recharge. Overall, information about woody plant encroachment impacts on groundwater resources across a range of scales is essential for long-range planning of water resources.