Utility of perennial bioenergy crops (e.g., switchgrass and miscanthus) offers unique opportunities to transition toward a more sustainable energy pathway due to their reduced carbon footprint, averted competition with food crops, and ability to grow on abandoned and degraded farmlands. Studies that have examined biogeophysical impacts of these crops noted a positive feedback between near-surface cooling and enhanced evapotranspiration (ET), but also potential unintended consequences of soil moisture and groundwater depletion. To better understand hydrometeorological effects of perennial bioenergy crop expansion, this study conducted high-resolution (2-km grid spacing) simulations with a state-of-the-art atmospheric model (Weather Research and Forecasting system) dynamically coupled to a land surface model. We applied the modeling system over the Southern Plains of the United States during a normal precipitation year (2007) and a drought year (2011). By focusing the deployment of bioenergy cropping systems on marginal and abandoned farmland areas (to reduce the potential conflict with food systems), the research presented here is the first realistic examination of hydrometeorological impacts associated with perennial bioenergy crop expansion. Our results illustrate that the deployment of perennial bioenergy crops leads to widespread cooling (1–2 °C) that is largely driven by an enhanced reflection of shortwave radiation and, secondarily, due to an enhanced ET. Bioenergy crop deployment was shown to reduce the impacts of drought through simultaneous moistening and cooling of the near-surface environment. However, simulated impacts on near-surface cooling and ET were reduced during the drought relative to a normal precipitation year, revealing differential effects based on background environmental conditions. This study serves as a key step toward the assessment of hydroclimatic sustainability associated with perennial bioenergy crop expansion under diverse hydrometeorological conditions by highlighting the driving mechanisms and processes associated with this energy pathway.