In temperate drylands, livestock grazing and irrigation agriculture alter biocrust cover and thereby soil nitrogen (N) dynamics. However, the influence of land use on biocrusts and soil N dynamics in tropical drylands is un-known. We evaluated the influence of rainfed agriculture and firewood extraction on biocrust functional groups and soil N dynamics in a tropical dryland. We collected biocrusts in abandoned croplands resulting from rainfed agriculture and mesquite shrublands resulting from firewood extraction to measure the cover of heterocystous cyanobacteria, non-heterocystous cyanobacteria, cyanolichens, and chlorolichens. We also collected soil below biocrusts to evaluate soil N dynamics (total and available N, N transformation rates, microbial biomass N), energy availability (total C), and microbial activity (C mineralization). We evaluated the correlation between biocrust functional group cover and soil N dynamics, and between microbial activity and soil N dynamics. In abandoned croplands, heterocystous cyanobacteria had high cover and were associated to altered soil N dy-namics. In mesquite shrublands, cyanolichens had high cover and were associated to unaltered soil N dynamics. In this tropical dryland, both activities have contrasting changes in biocrust functional group cover and soil N dynamics, probably due to differences in energy availability and soil microenvironments for microbial activity under biocrusts.