Dryland grasslands are vast and globally important and, as in all terrestrial ecosystems, soil microbial communities play fundamental roles in regulating dryland ecosystem function. A typical characteristic of drylands is the spatial mosaic of vascular plant cover surrounded by interspace soils, where biological soil crusts (biocrusts)—a complex community of organisms including bacteria, fungi, algae, mosses, and lichens—are common. The implications of this heterogeneity, where plants and biocrust cover co-occur, are often explored in the context of soil fertility and hydrology, but rarely has the impact of these multiple microhabitat types been simultaneously explored to determine the influence on bacterial and fungal communities, key biological players in these ecosystems. Further, our understanding of the temporal dynamics of bacterial and fungal communities in grasslands, and of how these dynamics depend on the microhabitat within the ecosystem, is notably poor. Here we used a temporally and spatially explicit approach to assess bacterial and fungal communities in a grassland on the Colorado Plateau, and to link variation in these communities to edaphic characteristics. We found that microhabitat (e.g., vascular plant rhizosphere, biocrust, and below biocrust) was the strongest driver of differences in bacterial and fungal community richness, diversity, and composition. Microhabitat type also significantly mediated the impact of temporal change in shaping community composition. Taken together, 29% of the variation in bacterial community composition could be explained by microhabitat, date, and microhabitat-by-date interactions, while only 11% of the variation in fungal community composition could be explained by the same factors, suggesting important differences in community assembly processes. Soil microbial communities dictate myriad critical ecosystem functions, thus understanding the factors that control their compostition is crucial to considering and forecasting how terrestrial ecosystems work. Overall, this case study provides insights for future studies on the spatial and temporal dynamics of bacterial and fungal communities in dryland grasslands.