The hyperarid soils of the Atacama Desert, Chile, contain the largest known nitrate deposits in the world. They also represent one of the most hostile environments for microbial life anywhere in the terrestrial biosphere. Despite known for its extreme dryness, several heavy rainfall events causing localised flash flooding have struck Atacama Desert core regions during the last five years. It remains unclear, however, whether these soils can support microbial denitrification. To answer this, we sampled soils along a hyperaridity gradient in the Atacama Desert and conducted incubation experiments using a robotized continuous flow system under a He/O2 atmosphere. The impacts of four successive extreme weather events on soil-borne N2O and N2 emissions were investigated, i) water addition, ii) NO3− addition, iii) labile carbon (C) addition, and iv) oxygen depletion. The 15N–N2O site-preference (SP) approach was further used to examine the source of N2O produced. Extremely low N2O fluxes were detected shortly after water and NO3− addition, whereas pronounced N2O and N2 emissions were recorded after labile-C (glucose) amendment in all soils. Under anoxia, N2 emissions increased drastically while N2O emissions decreased concomitantly, indicating the potential for complete denitrification at all sites. Although increasing aridity significantly reduced soil bacterial richness, microbial potential for denitrification and associated gene abundance (i.e., napA, narG, nirS, nirK, cnorB, qnorB and nosZ) was not affected. The N2O15N site preference values based on two end-member model suggested that fungal and bacterial denitrification co-contributed to N2O production in less arid sites, whereas bacterial denitrification dominated with increasing aridity. We conclude that soil denitrification functionality is preserved even with lowered microbial richness in the extreme hyperarid Atacama Desert. Future changes in land-use or extreme climate events therefore have a potential to destabilize the immense reserves of nitrate and induce significant N2O losses in the region.