Exacerbated inundations and saltwater intrusions due to sea‐level rise can significantly alter the ecology of low‐lying coastal drylands by affecting their nutrient cycling and productivity. During the present study, controls on production and consumption of nitrogen in soils of semiarid tropical climate with different levels of vegetation–salinity–moisture condition were investigated using 15N isotope dilution experiments. For this purpose, soils were collected from five land types including two in salt flat and one each in grassland (GL), wetland (WL), and an agricultural field. Soils with no vegetation, high salinity, and high moisture (salt flats) showed significant decline in gross production of nitrogen (mineralization rate: 0.21 ± 0.10 mg N·kg−1·d−1; nitrification rate: 0.27 ± 0.17 mg N·kg−1·d−1) compared to soils with vegetation, low salinity, and low moisture (GL, WL, and agricultural) (mineralization rate: 2.47 ± 1.74 mg N·kg−1·d−1; nitrification rate: 1.43 ± 1.30 mg N·kg−1·d−1). Backward stepwise regression analysis of the results indicated salinity to be the most important factor controlling nitrogen transformation rates. It is likely that soils undergoing frequent seawater exposure or excessive evaporation may experience slowdown in nitrogen cycling due to salinization leading to reduced nutrient production and consumption. Due to climate change, the areal extent of coastal drylands undergoing such decline in nutrient production is likely to increase, eventually leading to loss of productivity and desertification.