Summary Interactions between aboveground and belowground biota have the potential to modify ecosystem responses to climate change, yet little is known about how drought influences plant?soil feedbacks with respect to microbial mediation of plant community dynamics. We tested the hypothesis that drought modifies plant?soil feedback with consequences for plant competition. We measured net pairwise plant?soil feedbacks for two grassland plant species grown in monoculture and competition in soils that had or had not been subjected to a previous drought; these were then exposed to a subsequent drought. To investigate the mechanisms involved, we assessed treatment responses of soil microbial communities and nutrient availability. We found that previous drought had a legacy effect on bacterial and fungal community composition that decreased plant growth in conspecific soils and had knock-on effects for plant competitive interactions. Moreover, plant and microbial responses to subsequent drought were dependent on a legacy effect of the previous drought on plant?soil interactions. We show that drought has lasting effects on belowground communities with consequences for plant?soil feedbacks and plant?plant interactions. This suggests that drought, which is predicted to increase in frequency with climate change, may change soil functioning and plant community composition via the modification of plant?soil feedbacks.