In an effort to elucidate the factors affecting soil N dynamics in the Dry Chaco ecosystem, soil respiration and microbial biomass N were measured for one year underneath 5 vegetation types: a leguminous tree (Prosopis flexuosa DC), a non-leguminous tree (Aspidosperma quebraco-blanco Schlecht.), a non leguminous shrub (Larrea spp.). the open interspaces. and a pure grassland. Ammonifier and nitrifier densities and N content in litter were also measured in some cases. Results were compared with previously reported N mineralization rates and soil fertility. During the dry season microbial biomass N and net N mineralization were low, while accretion of easily mineralizable C occurred (estimated through soil respiration rates in lab under controlled temperature and moisture). With the onset of rain, microbial biomass N and N mineralization increased markedly, resulting in a decrease in easily mineralizable C. Throughout the wet season N mineralization varied with soil moisture while microbial biomass N remained consistently high. Mean values of immobilized N in this ecosystem were high (20-140 mg kg-1), of about the same order of magnitude as accumulated net N mineralization (50-150 mg kg-1 yr-1). Microbial decay in the dry season, considered as a source of easily mineralizable N, accounted for only 40% of gross N mineralization increase at the beginning of the wet season. Ammonifier densities correlated significantly with soil moisture and N mineralization, but nitrifiers did not. The highest values of total N, N mineralization, inorganic N, microbial biomass N, nitrifier densities, N content in litter, total organic C and easily mineralizable C were found under Prosopis and the lowest values under shrubs and the interspaces. The main differences between tree species were in N mineralization at the beginning of the wet season, in total and inorganic N pools, and in nitrifier densities; all of which were significantly lower under Aspidosperma than under Prosopis. N mineralization in the pure grassland was verv low despite high values of total N and C sources. Although N immobilized in microbial biomass was similarly high under Aspidosperma, Prosopis and the pure grassland, net N mineralization rates were quite different.