Elevated atmospheric CO2 (eCO2) affects soil-plant systems by stimulating plant growth, rhizosphere processes and altering the amount and quality of organic matter inputs. This study examined whether these plant-mediated processes indirectly influence the structure and function of soil microbial communities and soil carbon (C) and nitrogen (N) cycling. Surface soils (0–5 and 5–10 cm) of Calcarosol, Chromosol and Vertosol were sampled after 5 years' exposure to either ambient CO2 (aCO2; 390 ppm) or eCO2 (550 ppm) using free-air CO2 enrichment (SoilFACE). Changes in microbial community structure were not detected using automated ribosomal intergenic spacer analyses (ARISA). However, quantitative PCR of targeted organic C decomposition (cu, cbh), N mineralisation (apr, npr), nitrification (amoB, amoA, norA) and denitrification (nirK, narG, nosZ) genes showed that eCO2 reduced the abundance of half of the functional genes in the Chromosol and Vertosol and their abundance was tightly coupled with total C and N pools. In the Chromosol, total N and C of soil (<2 mm particles) was reduced by up to 20% and was associated with enhanced microbial activity (soil respiration). Soil C was also reduced in the Vertosol (15%, 5–10 cm); however greater laccase, reduced cellulase and lower microbial activity indicated that organic matter decomposition was currently limited by N. The loss of soil organic N and C under eCO2 was likely driven by greater N demand. This study highlighted that the indirect effects of eCO2 on functional capacity of soil microbial communities in dryland agricultural system depended on the soil type.