ABSTRACTSilage maize (Zea mays L.) intensification to maximise biomass production increases greenhouse gas emissions, accelerates climate change and intensifies the search for alternative bioenergy crops with high carbon (C) sequestration capacity. The perennial cup‐plant (Silphium perfoliatum L.) not only serves as a viable bioenergy source but may also be a promising soil C conservator. However, the dynamics of soil organic C (SOC) under the C3 cup‐plant, exposed to moderate drought conditions, that reduces growth rate without causing crop failure, compared with the drought‐tolerant C4 maize, remains unexplored. Here, we investigated in a lysimeter experiment the effects of moderate drought stress on crop growth and soil CO2 efflux under cup‐plant and silage maize compared with well‐watered conditions. Soil CO2 efflux along with root and shoot biomass, soil moisture and temperature as well as SOC and nitrogen (N) were measured over three consecutive years. Irrespective of the watering regime, cup‐plant induced a greater soil CO2 efflux (16% and 23% for 2020 and 2021, respectively), which was associated with higher root and shoot biomass compared with silage maize suggesting a substantial contribution of the roots to total soil CO2 efflux. In addition, soil CO2 efflux correlated negatively with soil dissolved N and positively with microbial C:N imbalance suggesting that low soil N availability influences soil CO2 efflux through processes related to N‐limitation such as N‐mining. Strikingly, moderate drought had no effect on soil CO2 efflux and C content and microbial biomass C, but increased dissolved organic C and microbial biomass N in both crops suggesting a complex interplay between C availability, N‐limitation and microbial adaptation under these conditions. Although cup‐plant increased soil CO2 efflux, the observed higher root and shoot biomass even under moderate drought conditions suggests a similar soil C management as silage maize; however, this still requires longer‐term investigation.