Nitrous oxide is a powerful greenhouse gas whose atmospheric growth rate has accelerated over the past decade. Most anthropogenic N2O emissions result from soil N fertilization, which is converted to N2O via oxic nitrification and anoxic denitrification pathways. Drought-affected soils are expected to be well oxygenated; however, using high-resolution isotopic measurements, we found that denitrifying pathways dominated N2O emissions during a severe drought applied to managed grassland. This was due to a reversible, drought-induced enrichment in nitrogen-bearing organic matter on soil microaggregates and suggested a strong role for chemo- or codenitrification. Throughout rewetting, denitrification dominated emissions, despite high variability in fluxes. Total N2O flux and denitrification contribution were significantly higher during rewetting than for control plots at the same soil moisture range. The observed feedbacks between precipitation changes induced by climate change and N2O emission pathways are sufficient to account for the accelerating N2O growth rate observed over the past decade.