Dryland ecosystems cover similar to 45% of the Earth's terrestrial surface and play an important role in biogeochemical cycling and food production, but widespread soil degradation and rainfall variability threaten plant productivity in many drylands. Compost, an organic soil amendment, has been proposed to increase soil carbon storage and water-holding capacity in drylands, and this management strategy may be particularly impactful in degraded drylands with low soil organic content. Compost additions and rainfall variability may interact to affect soil moisture, which is an important catalyst for soil microbial activity. Therefore, we investigated how variation in compost application amounts and simulated rainfall pulses affect soil moisture, microbial activity, and carbon content in a laboratory incubation study. Soils were amended with different amounts of compost (0, 0.35, and 0.70 g cm (-2)) and water pulses (5, 10, and 15 mm) in a full-factorial design. Each treatment received the same cumulative amount of water throughout the incubation, but pulses occurred at different frequencies (every 5, 10, and 15 days). We found that soil water content increased with increasing compost amount and with rainfall pulses that were larger but less frequent. Cumulative microbial respiration was highest with the large-infrequent pulse size, lowest with the small-frequent pulse size, and was enhanced by compost treatments. All moisture pulse treatments caused soil carbon losses, with compost inputs buffering losses. These results suggest that compost applications to degraded drylands may assist rehabilitation by enhancing soil moisture, microbial activity, and soil carbon, but the impacts will be modulated by rainfall dynamics.