Nitrogen cycling, microbial N transformations, and nitrate leaching are strongly affected by moisture availability. Land use history and plant community composition may impact the magnitude of these processes. An experiment was conducted to examine the effect of a simulated rainfall event on soil microbial biomass, C and N dynamics, and microbial community structure, as determined by phospholipid ester-linked fatty acid (PLFA) profiles, on cultivated and grassland soils from the Central Coast Region of California. Soils had similar parent material and texture. Intact cores were obtained from the field, and plant shoots and litter were removed. The cores were incubated at > -70 kPa, then dried briefly before adding water to simulate a 2.4 cm rainfall event. The microbial community structure, as determined by PLFA analysis, showed distinctive differences among the soils sampled. Microbial biomass and potential net mineralizable N were higher in the grassland than in the cultivated sites. Inorganic N also tended to be higher in the grassland sites. The rewetting event, which was preceded by only mild drought, caused few changes in these pools, but increased respiration and gaseous efflux. Efflux of carbon dioxide and nitric oxide after rewetting were higher in the grassland soils, but nitrous oxide efflux was approximately the same in grassland and cultivated soils. Further work will investigate these C and N dynamics and gaseous fluxes in the field during the fall and winter rainy period, both in the absence and in the presence of plants.