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The potential for increased drought frequency and severity linked to anthropogenic climate change in the semi-arid regions of the southwestern United States (US) is a serious concern. Multi-year droughts during the instrumental period and decadal-length droughts of the past two millennia were shorter and climatically different from the future permanent, 'dust-bowl-like' megadrought conditions, lasting decades to a century, that are predicted as a consequence of warming. So far, it has been unclear whether or not such megadroughts occurred in the southwestern US, and, if so, with what regularity and intensity. Here we show that periods of aridity lasting centuries to millennia occurred in the southwestern US during mid-Pleistocene interglacials. Using molecular palaeotemperature proxies to reconstruct the mean annual temperature (MAT) in mid-Pleistocene lacustrine sediment from the Valles Caldera, New Mexico, we found that the driest conditions occurred during the warmest phases of interglacials, when the MAT was comparable to or higher than the modern MAT. A collapse of drought-tolerant C(4) plant communities during these warm, dry intervals indicates a significant reduction in summer precipitation, possibly in response to a poleward migration of the subtropical dry zone. Three MAT cycles ∼2 °C in amplitude occurred within Marine Isotope Stage (MIS) 11 and seem to correspond to the muted precessional cycles within this interglacial. In comparison with MIS 11, MIS 13 experienced higher precessional-cycle amplitudes, larger variations in MAT (4-6 °C) and a longer period of extended warmth, suggesting that local insolation variations were important to interglacial climatic variability in the southwestern US. Comparison of the early MIS 11 climate record with the Holocene record shows many similarities and implies that, in the absence of anthropogenic forcing, the region should be entering a cooler and wetter phase.