Each rain event generates a pulse of soil moisture triggering belowground processes in semiarid grasslands. Essential to our understanding of how water pulses affect nitrogen mineralization is the need to identify how plant functional traits relevant to biogeochemical cycling interact with the activity of soil organisms and consequently control belowground processes. We examined the short-term development of soil NH₄⁺ and NO₃^- in experimental plots composed of Bouteloua gracilis phenotypes with contrasting tissue lignin concentrations, in response to a short simulated rainfall event during the dry season when sporadic short rainfall events may trigger soil microbial activity but not plant growth. We also set up 30-day laboratory incubations to determine nitrogen mineralization potential. Soil cores were extracted from six one-square-meter plots of high-lignin (HL), low lignin (LL) and mixed lignin (HLL) Bouteloua phenotypes prior and 24, 48 and 72 hours after the application of a water pulse. The rate of net ammonification was greatly stimulated (P<0.001) in the LL and HLL treatments after 48 hours. The rate of net nitrification initiated after only 24 hours but only in the LL treatments (P<0.0002). Net nitrification potential was higher in LL treatments (0.13 NO₃^-N kg^-1) than HL (0.07 NO₃^-N kg^-1) (P<0.1) treatments. Nitrogen mineralization potential was overall negative and did not differ among treatments (P>0.1). Hence, while the seasonal distribution of water pulses may contribute to temporal accumulations of mineral nitrogen in dry soils, plant biogeochemical traits such as carbon quality may contribute to a heterogeneous spatial distribution of soil mineral nitrogen.