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Cross‐scale structural and functional connectivity feedbacks can amplify exogenous forces in dryland environments leading to ecosystem state change (e.g., from grassland to shrubland). Attenuation of these connectivity feedbacks would ostensibly be required to restore transitioned ecosystems to their former state. We compared structural, hydrologic, and sediment connectivity on a shrub‐encroached semi‐arid grassland in south‐eastern Arizona, USA, to that of a nearby site experiencing an increase in non‐native perennial grass (Lehmann lovegrass) abundance 5‐year following treating shrubs with tebuthiuron herbicide. Soil/vegetation attributes were quantified and paired with hydrologic experiments at fine (0.5 m2) to hillslope (50 m2) scales. Fine‐scale rainfall simulations (120 mm·h−1 rainfall intensity; 45 min) showed interspaces between shrubs were hydrologically similar on the treated and control sites, whereas herbicided shrub patches were more resource conserving than those within the control (terminal infiltration rates of 105 and 71 mm·h−1, respectively). High structural connectivity of bare ground (basal gap lengths >200 cm) was correlated with increased concentrated flow run‐off and accompanied by greater sediment yields within the untreated site at a coarse scale (~9 m2). Hillslope‐scale modelling suggested a divergence between hydrologic and sediment connectivity: run‐off from high intensity rainfall was similar between sites, while predicted sediment yield was 44% less within the tebuthiuron‐treated site. Our results indicate (i) hydraulic properties of soils between shrubs are unresponsive to herbicide treatment, (ii) disruption of structural connectivity of these interspaces associated with grass cover increases subsequent to herbicide application attenuated run‐off and the energy needed for sediment transport, and (iii) sediment connectivity is reduced by conversion to a novel grassland ecological state. [ABSTRACT FROM AUTHOR]