Significant gaps in our understanding of how global change drivers interact to affect the resistance and functioning of microbial communities hinders our ability to model ecosystem responses and feedbacks to co-occurring global stressors. Here, we investigated the effects of extreme drought and exotic plants, two of the most significant threats to Mediterranean-type ecosystems, on soil microbial community composition and carbon metabolic genes within a four-year field rainfall manipulation experiment. We combined measurements of bulk microbial and soil properties with high-throughput microbial community analyses to elucidate microbial responses and microbial-mediated alterations to carbon cycling. While microbial responses to experimental droughts were weak, scant rainfall periods resulted in decreased microbial biomass and activity, and relative abundances of bacterial groups such as Proteobacteria, Verrucomicrobia, and Acidobacteria decreased concomitantly with increases in Actinobacteria, Chloroflexi, and Firmicutes abundance. Soils under exotic plants had increased temperatures, enhanced infiltration during rainfall events, and decreased water retention and labile carbon in comparison to soils under native plants. Higher peaks and more seasonally variable microbial activity were found under exotic plants and, like drought periods, the microbial community shifted towards osmotic stress life-strategies. Relationships found between microbial taxonomic groups and carbon metabolic genes support the interpretation that exotic plants change microbial carbon cycling by altering the soil microclimate and supplying easily decomposed high-quality litter. Soil microbial community responses to drought and exotic plants could potentially impact ecosystem C storage by producing a smaller, more vulnerable C pool of microbial biomass that is prone to increased pulses of heterotrophic respiration.