Throughout Earth's history, drought has been a common crisis in terrestrial ecosystems; in human societies, it can cause famine, one of the Four Horsemen of the apocalypse. As the global hydrological cycle intensifies with global warming, deeper droughts and rewetting will alter, and possibly transform, ecosystems. Soil communities, however, seem more tolerant than plants or animals are to water stress—the main effects, in fact, on soil processes appear to be limited diffusion and the limited supply of resources to soil organisms. Thus, the rains that end a drought not only release soil microbes from stress but also create a resource pulse that fuels soil microbial activity. It remains unclear whether the effects of drought on soil processes result from drying or rewetting. It is also unclear whether the flush of activity on rewetting is driven by microbial growth or by the physical/chemical processes that mobilize organic matter. In this review, I discuss how soil water, and the lack of it, regulates microbial life and biogeochemical processes. I first focus on organismal-level responses and then consider how these influence whole-soil organic matter dynamics. A final focus is on how to incorporate these effects into Earth System models that can effectively capture dry–wet cycling.