Up to half of the world's drylands have degraded, dysfunctional soils that lower success rates of restoration efforts to reestablish lost vegetation. Because soil amendments of organic matter have the potential to improve multiple ecosystem functions and overall soil health, we added a mulch of whole mesquite (Prosopis velutina) branches—both alone and in combination with 3 and 6 cm of compost—to a degraded semiarid rangeland. We then measured effects of these organic amendments on a suite of soil health indicators as well as plant cover and abundance. We found that surface applications of these amendments improved several indicators of soil health after two summer growing seasons. Soil temperature decreased and soil moisture increased in all treatments with organic amendments. However, during drier times of the year and in response to smaller rain events, mulch alone increased soil moisture more so than when combined with compost. As expected, total soil nitrogen was greatest with compost addition. Soil organic carbon, water‐stable aggregate size, and microbial abundance did not respond significantly to any treatment. Mesquite mulch increased native plant cover and abundance when applied without compost and increased plant cover when combined with 3 cm of compost, but it did not increase plant abundance or cover when combined with 6 cm of compost. Collectively, these results suggest that a thin layer of compost—but particularly woody branches used as mulch—can improve success rates of revegetation in dryland ecosystems by moderating the soil microclimate.