Overexploitation of natural forest resources under the environmental conditions on the tropical semiarid region of Brazil is the main cause of soil degradation. This leads to insufficient restoration of both microbial and plant biomass and net loss of C and N from soils. In this study, we investigated degraded, partially degraded, and preserved Luvisols to quantify functional and total microorganisms and their activities and determine total C and N stocks. We hypothesize that degraded Luvisols have significant reduction in C and N stocks, abundance, and activity of total bacteria and fungi, diazotroph and phosphorus-mineralizing bacteria in relation to preserved or partially degraded Luvisols. We evaluated total C and N contents and stocks, microbial biomass (C, N and P), soil basal respiration, alkaline phosphatase activity, glomalin content, metabolic and microbial quotients and quantified 16S rRNA, 18S rRNA, nifH and phoD genes by real time quantitative PCR. C and N stocks of degraded Luvisols were a third of the stocks found in preserved soils. The values of soil microbial biomass and soil basal respiration on the degraded soils were ca. 1/5 and 1/20 in preserved soils; however, there was no indication of metabolic stress. The abundance of diazotrophic and phosphorus-mineralizing bacteria decreased in degraded Luvisols; nevertheless, total bacteria and fungi gene abundance as well as the glomalin content remained unchanged. The alkaline phosphatase activity indicated that mineralizing microorganisms could make phosphorus constantly available even in soils without vegetation cover.