Microbial C and N transformation rates in air-dried and subsequently rewetted coniferous forest floor material were examined in a laboratory incubation study. Gross N transformation rates were determined through parallel 15NH4+ and 15NO3- enrichment experiments. After drying of the litter for 12 d to a water content of 10% of dry weight, CO2 respiration, net N mineralization and nitrification rates were strongly restricted. Microbial biomass C was reduced to 67% of the amount in the continuously moist material. Remoistening of the dry litter to a water content of 340% resulted in a flush in C and net N mineralization within a few hours after rewetting. The increase in net N mineralization could be attributed to a larger increase in gross N mineralization relative to the increase in gross N immobilization. Gross N immobilization had increased to the same rate as gross N mineralization after 26 h, and a small secondary peak in respiration and microbial C was observed 48 h after rewetting. It was concluded that both biomass-derived substrate with a low C-to-N ratio and `nonbiomass'-derived substrate with a high C-to-N ratio have been released, and metabolized, as a result of the drying-rewetting treatment. Despite the very extreme drying treatment, the mineralization flush after rewetting could not compensate for the large reduction in CO2 and mineral N production during dry conditions due to its short duration. Since there was no increase in nitrification rate after drying and rewetting, the NO3- concentration at the end of the incubation was strongly reduced due to the extremely slow net nitrification rates during desiccation.