Continental drying and associated dryland expansion would accelerate environmental degradation and desertification. However, the rate of continental drying commonly assessed with an aridity index is inconsistent with observations and projections of widespread greening and increased global runoff. This raises questions about the accuracy of assessment methods and projections of continental drying and dryland dynamics in a warming world. Here we show that the continental drying trend has been exaggerated because the potential evapotranspiration (PET) and its rate of increase over time are grossly overestimated with the widely used Penman equations. Using an energy-based PET estimator, we bias correct the aridity index and find considerably weaker and less extensive continental drying (47% of the global land area) than the 61%–65% based on Penman equations. Dryland expansion is projected to occur over only 2.1% of global land area in a high-emission scenario in the 21st century. Moreover, the corrected aridity index and ecohydrological and hydroclimate projections all show no change in significance consistently in the extent of global drylands based on 32 climate models. These findings resolve the ongoing debate about global dryland expansion and have far-reaching implications for understanding long-term changes in the climate system and their impacts on terrestrial ecohydrological processes.