While seasonally dry conditions are typical of large areas of the tropics, their biogeochemical responses to seasonal rainfall and soil carbon (C) sequestration potential are not well characterized. Seasonal moisture availability positively affects both productivity and soil respiration, resulting in a delicate balance between C deposition as litterfall and C loss through heterotrophic respiration. To understand how rainfall seasonality (i.e., duration of the wet season and rainfall distribution) affects this balance and to provide estimates of long-term C sequestration, we develop a minimal model linking the seasonal behavior of the ensemble soil moisture, plant productivity, related C inputs through litterfall, and soil C dynamics. A drought-deciduous caatinga ecosystem in northeastern Brazil is used as a case study to parameterize the model. When extended to different patterns of rainfall seasonality, the results indicate that for fixed annual rainfall, both plant productivity and soil C sequestration potential are largely, and nonlinearly, dependent on wet season duration. Moreover, total annual rainfall is a critical driver of this relationship, leading at times to distinct optima in both production and C storage. These theoretical predictions are discussed in the context of parameter uncertainties and possible changes in rainfall regimes in tropical dry ecosystems.