Drainage is an important mitigation strategy to reduce methane emission from rice paddies. Here, we investigated how drainage shapes structure and functioning of the paddy soil microbial community. Soil microcosms were pre-incubated for 28 days under flooded conditions followed by nine days' drainage. Upon sampling, metatranscriptome libraries were generated from flooded and drained soils. With drainage, oxygen concentration increased from suboxic (1.6 μmol/l) to near-atmospheric (240 μmol/l) levels. Concurrently, water potential decreased to −0.87 MPa (corresponding to 11% soil moisture content). Drainage did not affect the absolute (RT-qPCR) SSU rRNA abundance of Bacteria and Archaea, but changed significantly their community composition. Firmicutes (Clostridiaceae, Ruminococcaceae, and Lachnospiraceae) decreased in relative abundance, while Actinobacteria (Nocardioidaceae) and Proteobacteria (Comamonadaceae) increased. These taxon-specific dynamics were observed on rRNA and mRNA levels. Methanogen SSU rRNA was stable, but methanogen mRNA significantly decreased. This coincided with complete inhibition of the methane production potential in drained soil. Among Eukarya, protists and Amoebozoa thrived in flooded soil, while Fungi proliferated with drainage. In particular, Pezizomycotina (Ascomycota) and Agaricomycotina (Basidiomycota) were the most abundant fungal groups in dry soil. Taking community-wide mRNA expression as a proxy, the overall microbial activity was not severely affected by drainage. The proportion of mRNA in total RNA increased from 1.7% to 2%. In particular, the abundance of mRNA related to transcription and translation significantly increased. Correspondingly, the bacterial SSU rRNA transcript/gene ratio increased 12-fold with drainage, suggesting the development of a metabolically highly active microbial community well adapted to oxic and dry soil conditions. This community showed an increased transcription of genes involved in the degradation of lignin, peptidoglycan, and storage molecules such as glycogen. Under flooded conditions, the microbial community expressed a higher level of glycoside hydrolase transcripts involved in cellulose and chitin degradation. •Among Bacteria, drainage promoted enrichment of Proteobacteria and Actinobacteria.•Among Eukarya, drainage induced strong proliferation of the Ascomycota (fungi).•The newly arriving microbial community exhibited high transcriptional activity.•Methanogen abundance was stable on SSU rRNA level but not on mRNA level.•mRNA turnover was a greater proxy for community change than rRNA dynamics.