Maximum and minimum soil temperatures affect belowground processes. In the past 50 years in arid regions, measured reductions in the daily temperature range of air (DTRair) most likely generated similar reductions in the unmeasured daily temperature range of soil (DTRsoil). However, the role of DTRsoil in regulating microbial and plant processes has not been well described. We experimentally reduced DTRsoil in the Chihuahuan Desert at Big Bend National Park over 3 years. We used shade cloth that effectively decreased DTRsoil by decreasing daily maximum temperature and increasing nighttime minimum temperature. A reduction in DTRsoil generated on average a twofold increase in soil microbial biomass carbon, a 42% increase in soil CO2 efflux and a 16% reduction in soil NO3−–N availability; soil available NH4+–N was reduced by 18% in the third year only. Reductions in DTRsoil increased soil moisture up to 15% a few days after a substantial rainfall. Increased soil moisture contributed to higher soil CO2 efflux, but not microbial biomass carbon, which was significantly correlated with DTRsoil. Net photosynthetic rates at saturating light (Asat) in Larrea tridentata were not affected by reductions in DTRsoil over the 3 year period. Arid ecosystems may become greater sources of C to the atmosphere with reduced DTRsoil, resulting in a positive feedback to rising global temperatures, if increased C loss is not eventually balanced by increased C uptake. Ultimately, ecosystem models of N and C fluxes will need to account for these temperature-driven processes.