Drought-rehydration cycles are key drivers of soil biogeochemical processes in arid agroecosystems, yet the mechanisms regulating soil-microbe-plant interactions under such conditions remain insufficiently understood. We hypothesized that mild drought imposed at critical phenological stages could stimulate soil biochemical processes and microbial functional activity, thereby supporting spring wheat productivity and economic return. To test this hypothesis, a two-year split-plot field experiment was conducted using a drought-tolerant variety (Xinchun 6, XC 6) and a drought-sensitive variety (Xinchun 22, XC 22), with drought applied at the tillering (T) and jointing (J) stages. Three irrigation regimes were established based on field capacity (FC): normal irrigation (75-80 % FC, CK), mild drought (60-65 % FC, T1 and J1), and moderate drought (45-50 % FC, T2 and J2), each maintained for 7 days followed by rehydration. Mild drought at the tillering stage (T1) produced the most pronounced positive effects after rehydration. Compared with CK, T1 significantly improved soil chemical properties, enhanced key enzyme activities related to carbon and nitrogen cycling, and increased microbial biomass. Microbial alpha diversity was also elevated under T1, suggesting improved community stability and functional redundancy. Following rehydration, enhanced microbial activity likely accelerated nutrient mineralization, thereby supporting dry matter recovery and allocation to grain. As a result, grain yield increased by 1.89-2.32 %, while net revenue increased by 10.19-12.07 %. The drought-tolerant variety XC 6 consistently showed greater agronomic and economic benefits than XC 22, indicating that variety selection can amplify the positive effects of mild drought-rehydration management. Overall, mild drought at the tillering stage followed by rehydration represents a water-efficient irrigation strategy that maintains yield and profitability while enhancing soil biochemical functioning and system resilience. This approach offers a practical pathway for sustainable spring wheat production in arid regions, although long-term monitoring is required to assess the persistence of these ecological benefits.