Drought represents a significant stress to soil microorganisms and is known to reduce microbial activity and organic matter decomposition in Mediterranean ecosystems. However, we still lack a detailed understanding of the drought stress adaptations of microbial decomposers. We hypothesised that drought causes greater microbial allocation to stress tolerance relative to growth pathways. Here we present metatranscriptomic and metabolomic data on the physiological response of in situ microbial communities on plant leaf litter to long-term drought and pulse wetting in Californian grass and shrub ecosystems. Wetting litter after a long dry summer caused only subtle shifts in gene expression. On grass litter, communities from the decade-long ambient and reduced precipitation treatments had distinct functional profiles. The most discernable physiological adaptations to drought were production or uptake of compatible solutes to maintain cellular osmotic balance, and synthesis of capsular and extracellular polymeric substances as a mechanism to retain water. The results show a clear functional response to drought in grass litter communities with greater allocation to survival relative to growth that could affect decomposition under drought. In contrast, communities on chemically more diverse and complex shrub litter had smaller physiological differences in response to long-term drought but higher investment in resource acquisition traits across treatments, suggesting that the functional response to drought is constrained by substrate quality. Our findings suggest, for the first time in a field setting, a trade-off between microbial drought stress tolerance, resource acquisition and growth traits in leaf litter microbial communities.Introduction: