Biological soil crusts (biocrusts) are common and ecologically important members of dryland ecosystems worldwide, where they stabilize soil surfaces and contribute newly fixed C and N to soils. To test the impacts of predicted climate change scenarios on biocrusts in a dryland ecosystem, the effects of a 2–3 °C increase in soil temperature and an increased frequency of smaller summer precipitation events were examined in a large, replicated field study conducted in the cold desert of the Colorado Plateau, USA. Surface soil biomass (DNA concentration), photosynthetically active cyanobacterial biomass (chlorophyll a concentration), cyanobacterial abundance (quantitative PCR assay), and bacterial community composition (16S rRNA gene sequencing) were monitored seasonally over 2 years. Soil microbial biomass and bacterial community composition were highly stratified between the 0–2 cm depth biocrusts and 5–10 cm depth soil beneath the biocrusts. The increase in temperature did not have a detectable effect on any of the measured parameters over 2 years. However, after the second summer of altered summer precipitation pattern, significant declines occurred in the surface soil biomass (avg. DNA concentration declined 38%), photosynthetic cyanobacterial biomass (avg. chlorophyll a concentration declined 78%), cyanobacterial abundance (avg. gene copies g−1 soil declined 95%), and proportion of Cyanobacteria in the biocrust bacterial community (avg. representation in sequence libraries declined 85%). Biocrusts are important contributors to soil stability, soil C and N stores, and plant performance, and the loss or reduction of biocrusts under an altered precipitation pattern associated with climate change could contribute significantly to lower soil fertility and increased erosion and dust production in dryland ecosystems at a regional scale.