Event-driven and diel dynamics of soil respiration (Rs) strongly influence terrestrial carbon (C) emissions and are difficult to predict. Wetting events may cause a large pulse or strong inhibition of Rs. Complex diel dynamics include hysteresis in the relationship between Rs and soil temperature. The mechanistic basis for these dynamics is not well understood, resulting in large discrepancies between predicted and observed Rs. We present a unifying approach for interpreting these phenomena in a hot arid agricultural environment. We performed a whole ecosystem wetting experiment with continuous measurement of Rs to study pulse responses to wetting in a heterotrophic system. We also investigated Rs during cultivation of Sorghum bicolor to evaluate the role of photosynthetic C in the regulation of diel variation in Rs. Finally, we adapted a Rs model with sensitivity to soil O2 and water content by incorporating two soil C pools differing in lability. We observed a large wetting-induced pulse of Rs from the fallow field and were able to accurately simulate the pulse via release of labile soil C. During the exponential phase of plant growth, Rs was inhibited in response to wetting, which was accurately simulated through depletion of soil O2. Without plants, hysteresis was not observed; however, with growing plants, an increasingly significant counterclockwise hysteresis developed. Hysteresis was simulated via a dynamic photosynthetic C pool and was not likely controlled by physical processes. These results help characterize the complex regulation of Rs and improve understanding of these phenomena under warmer and more variable conditions.