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Denitrification is an anaerobic respiration that reduces nitrogen (N) oxides (NO₃ ⁻, NO₂ ⁻) to N gases (N₂O, N₂). Our hypothesis suggests that this process might be an important process in depleting nitrogen in dryland soils, based on the idea that the intensity of microbial respiration following infrequent rainfall events and floods, is high enough to deplete soil O₂ concentrations and allow denitrification to occur. We tested our hypothesis by analyses of soil surface samples, collected along a rainfall gradient. This enabled us to evaluate the relationship between rainfall amount and denitrification potential. Soils were collected from beneath dominant shrubs and from the biological soil crusts (BSC) in the spaces between them. In incubated soils respiration decreased rapidly after 12 h while denitrification peaked at 24 h. Both respiration and denitrification were higher in soils beneath shrubs than in the BSC. However, BSC account for up to 88% of the land cover at the drier end and 60% in the wetter end of the gradient and may therefore contribute the majority of soil gaseous emissions. Denitrification:respiration increased, in soil samples collected, as rainfall gradient decreased, suggesting that denitrification is an increasingly important component of microbial respiration as aridity increases.