Conventional dryland cropping systems are characterised by low crop diversity and frequent fallows. This has significant impacts on soil microbes that underpin soil function. Diversifying crop rotations can potentially counter these effects; however, limited data exists on the impacts of diversified crop rotations on soil microbes in drylands. Using phylogenetic marker gene sequencing, we characterised soil microbial diversity in conventional and diversified dryland crop rotations in subtropical Australia. This included winter and summer dominant rotations. Conventional systems were cereal-dominant with a crop-fallow rotation. Diversified systems included greater crop diversity, double crops, cover crops, and a multi-year ley pasture. In summer rotations with increased crop diversity and cover crops, bacterial and fungal richness increased, and distinct communities were formed compared to fallow land. Often, these community shifts were associated with greater soil organic carbon (SOC) and nitrogen. All winter rotations had distinct fungal communities and ley pasture resulted in greater fungal diversity compared to other rotations. No effects of the winter rotations were evident on bacterial communities. Our results show that diversification of dryland crop rotations leads to significant shifts in soil microbial communities in both winter and summer cropping systems. Both summer and winter rotations incorporating cover crops and ley pasture had greater soil respiration and nitrogen, indicating increases in soil fertility. These rotations may offer an alternative to conventional crop-fallow rotations to counter ongoing declines in soil health.Supplementary InformationThe online version contains supplementary material available at 10.1007/s00248-022-02074-w.