Ecosystems may exhibit alternative stable states (ASS) in response to environmental change. Modelling and observational data broadly support the theory of ASS, however evidence from manipulation experiments supporting this theory is limited. Here, we provide long-term manipulation and observation data supporting the existence of drought induced alternative stable soil moisture states (irreversible soil wetting) in upland Atlantic heath, dominated by Calluna vulgaris (L.) Hull. Manipulated repeated moderate summer drought, and intense natural summer drought both lowered resilience resulting in shifts in soil moisture dynamics. The repeated moderate summer drought decreased winter soil moisture retention by ∼10%. However, intense summer drought, superimposed on the experiment, that began in 2003 and peaked in 2005 caused an unexpected erosion of resilience and a shift to an ASS; both for the experimental drought manipulation and control plots, impairing the soil from rewetting in winter. Measurements outside plots, with vegetation removal, showed no evidence of moisture shifts. Further independent evidence supports our findings from historical soil moisture monitoring at a long-term upland hydrological observatory. The results herald the need for a new paradigm regarding our understanding of soil structure, hydraulics and climate interaction.