This study aimed at quantifying the consequences of reduced precipitation and plant diversity on soil microbial community functioning in a Mediterranean shrubland of southern France. Across a natural gradient of shrub species diversity, we established a total of 92 plots (4 x 4 m) with and without a moderate rain exclusion treatment of about 12 % of total precipitation. Shrub diversity included all possible combinations of the four dominant species (Cistus albidus, Quercus coccifera, Rosmarinus officinalis, and Ulex parviflorus). Respective leaf litter mixtures of these species combinations were exposed in all plots over 2 years. We quantified how litter species richness and the reduction in precipitation affected the soil microbial substrate utilization (measured by CO2 evolution using the MicroResp method) on soil samples collected underneath each individual litter mixture after 1 and 2 years of decomposition. Moderate precipitation reduction had a minor impact, but litter species richness and the dissimilarity in phenolic concentrations (estimated using Rao's quadratic entropy) showed a positive effect on the diversity of substrates metabolized by the microbial communities. Moreover, litter species richness increased soil microbial activity by increasing the catabolic diversity of the soil microbial community. These effects were mostly driven by the presence of Quercus and Ulex leaf litter, which at the same time reduced microbial metabolic dominance, while the presence of Rosmarinus had opposite effects. Our data suggest that plant species loss can have stronger effects on the functioning of soil microbial communities than moderate drought, with potentially important feedbacks on biogeochemical cycling in Mediterranean shrubland ecosystems.