Soil water repellency (SWR) is a common phenomenon observed throughout the world. It has a significant impact on water infiltration, altering soil hydrology and consequently the soil microbial community and nutrient cycling. Despite the importance of this phenomenon, the processes involved in the development and breakdown of SWR are poorly understood. The importance of the microbial community for SWR is becoming increasingly apparent. In this study, relationships between microbial activities and SWR were investigated by utilising the patchy occurrence of SWR to select both repellent and wettable soils in six locations of the east coast of the North Island of New Zealand. Samples were from directly adjacent locations in mid spring and late summer, and a range of soil physico-chemical properties and enzyme activities were measured. The degree and potential persistence of SWR did not change between the two sampling times, whereas actual persistence of SWR increased. Soil moisture decreased between the two times, and although there was an inverse relationship between moisture and actual persistence of SWR in late summer, unexpectedly, it was a positive relationship in spring. Phosphatase, arylsulfatase and polysaccharide degrading enzyme activities increased with increasing SWR, whereas peroxidase activity decreased. The possible effects of increasing temperature and decreasing water content were modelled, and the observed relationships were strengthened. Arylsulfatase activity was strongly correlated with the degree of SWR, as was extractable organic sulfate, suggesting that the breakdown of sulfate-esters within humic material in soil may be involved in the release and accumulation of SWR-inducing hydrophobic compounds.