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Drylands contain a third of the organic carbon stored in global soils; however, the long-term dynamics of soil organic carbon and soil organic matter (SOM) in drylands remain poorly understood relative to dynamics of the vegetation carbon pool. We examined long-term patterns in SOM against both climate and prescribed fire in a Chihuahuan Desert grassland in central New Mexico, USA. SOM was measured each spring and fall for 25 years (1989–2014) in unburned desert grassland and from 2003 to 2014 following a prescribed fire. SOM concentration from 0-20 cm depth did not show a clear long-term trend but fluctuated seasonally at both burned and unburned sites, ranging from a minimum of 0.9% to a maximum of 3.3%. SOM concentration declined nonlinearly in wet seasons and peaked in dry seasons. These results not only contrast with the positive relationships between aboveground net primary production and precipitation for this region, but also with previous reports of greater SOM in wetter sites across drylands globally, suggesting that space is not a good substitute for time in predicting the dynamics of dryland SOM. We suggest that declines in SOM in wet periods are caused by increased soil respiration, runoff, leaching, and soil erosion. In addition to tracking natural variability in climate, SOM concentration also decreased by 14% following prescribed fire, a response that magnified over time and has persisted for nearly a decade due to the slow recovery of primary production. Our results document the surprisingly dynamic nature of soil organic matter and its high sensitivity to climate and fire in this dryland ecosystem.