Terrestrial ecosystems are increasingly threatened by extreme drought events. Soil microbial communities are central to terrestrial ecosystem function via their role in regulating biogeochemical cycling. Consequently, the impact of increasingly intense drought events on soil microbial communities will have knock-on effects for how ecosystems cope with climate change. In an outdoor grassland mesocosm experiment, we determined how increasing drought intensity affects bacterial and fungal community composition, and functioning, during and after drought. We also tested whether plant community resource acquisition strategy (fast- versus slow-strategy plant communities), plant community composition, and plant functional traits mediate soil microbial responses to increasing drought intensity. We found that increasing drought intensity markedly shifted bacterial and fungal community composition, and these effects persisted until the end of the experiment (two months after re-wetting). Bacterial and fungal communities that experienced severe droughts did not return to baseline composition, while those that experienced a mild drought did. Microbial community functioning (potential extracellular enzyme activity) was reduced at peak drought and shortly after re-wetting. While drought intensity effects on bacterial or fungal communities were insensitive to plant community resource acquisition strategy, functional group abundance (aboveground biomass of grass or forb plant species) composition (grass:forb ratio) and leaf traits (leaf dry matter content and leaf nitrogen concentration) explained significant variation in bacterial and fungal community composition during and after drought. Notably, plant community leaf dry matter content and soil nitrogen were the key factors mediating the effect of increasing drought intensity on microbial indicator taxa (ASVs). We conclude that increasing drought intensity affects grassland soil microbial communities during and after drought, and this impact is influenced by plant community composition and functional traits.