Biological soil crusts (biocrusts) release the reactive nitrogen gases (N_r) nitrous acid (HONO) and nitric oxide (NO) into the atmosphere, but the underlying microbial process controls have not yet been resolved. In this study, we analyzed the activity of microbial consortia relevant in N_r emissions during desiccation using transcriptome and proteome profiling and fluorescence in situ hybridization. We observed that < 30 min after wetting, genes encoding for all relevant nitrogen (N) cycling processes were expressed. The most abundant transcriptionally active N-transforming microorganisms in the investigated biocrusts were affiliated with Rhodobacteraceae, Enterobacteriaceae, and Pseudomonadaceae within the Alpha- and Gammaproteobacteria. Upon desiccation, the nitrite (NO₂^-) content of the biocrusts increased significantly, which was not the case when microbial activity was inhibited. Our results confirm that NO₂^- is the key precursor for biocrust emissions of HONO and NO. This NO₂^- accumulation likely involves two processes related to the transition from oxygen-limited to oxic conditions in the course of desiccation: (i) a differential regulation of the expression of denitrification genes; and (ii) a physiological response of ammonia-oxidizing organisms to changing oxygen conditions. Thus, our findings suggest that the activity of N-cycling microorganisms determines the process rates and overall quantity of N_r emissions.