Drought has consequences for microbial decomposition rates, including indirect effects through changes in plant litter chemistry. Here, we studied the impact of a decade-long drought on plant litter chemistry and microbial decomposition traits in a semi-arid ecosystem during an 18-month litter bag experiment. We investigated litter sourced from four conditions: grass and shrub vegetation under ambient and reduced precipitation. We hypothesized that litter chemistry drives microbial decomposition capabilities and enzyme activity due to vegetation differences and drought effects on litter chemistry. We found that carbohydrate-rich grass litter had a higher abundance of decomposition genes detected using metagenomics and enzyme activity than more recalcitrant shrub litter, which was richer in lignin and lipids; these patterns were related to substrate supply. Drought decreased some carbohydrate fractions in grass litter but did not change the lignin fraction in grass and shrub litter, suggesting that drought does not make litter more recalcitrant. Most decomposition genes and enzyme activities were not significantly affected by drought, thereby maintaining decomposition rates. Microbial community succession patterns-decreasing fungal abundance and increasing bacterial abundance with time-corresponded with decreasing chitin gene abundance and increasing peptidoglycan gene abundance over time, indicating microbial necromass recycling. We demonstrate minimal litter chemistry-mediated effects of drought but show significant changes in community composition and their decomposition capabilities over time, highlighting that complex microbial-chemical interactions under climate change can influence ecosystem-scale processes.IMPORTANCEClimate change is causing more severe and frequent droughts in semi-arid ecosystems, affecting soil microbes breaking down plant litter. Our research focuses on understanding the less studied pathway of drought impact on microbes via changes in plant litter chemistry. Drought can alter the plant litter chemistry by changing the composition and physiology of plants, which can alter microbial decomposition and ecosystem-level carbon cycling. We investigated litter decomposition traits of microbial communities in grass and shrub litter under long-term drought. There were significant changes in litter chemistry under drought but no increase in lignin fraction. Despite this, microbial communities maintained their decomposition capabilities under drought, highlighting the ability of microbes to adapt and continue functioning. We also demonstrate unique microbial community succession patterns and dead biomass recycling, which can have implications for carbon cycling rates in the ecosystem. This study sheds light on the complex microbial interactions that affect ecosystem functioning under climate change.