•Drought inhibition on deadwood CO2 efflux increased with drought intensity.•Drought-induced decrease in wood decay is primarily controlled by wood microbes.•Microbial community shifts from bacteria to fungi as drought intensity increases. Climate change has significantly increased the frequency and intensity of drought events in recent decades, which may affect the decomposition of organic matter such as deadwood. Previous studies have examined the impacts of microclimate and wood traits on deadwood decomposition, but how wood microbes regulate effects of drought intensity on deadwood decomposition remains unclear. In this study, a field drought experiment was conducted with three throughfall exclusion levels (i.e., control, −35% and −70% rainfall treatments) in a subtropical forest to probe relative importance of microclimate, wood traits, and microbial biomass on wood decomposition. Our results showed that the −35% and −70% rainfall treatments significantly decreased wood CO2 efflux by 28.27% and 47.49%, respectively. Drought-induced decreases in wood CO2 efflux were mainly mediated by wood microbial biomass, particularly wood fungi biomass. The structural equation modelling indicated a shift in the dominant wood microbial communities in regulating wood CO2 efflux from bacteria to fungi as drought intensities increased. Our findings highlight the crucial role of wood microbial community with the trade-off between fungi and bacteria on deadwood decomposition under drought, which should be taken into account to decode forest carbon cycle − climate feedback in the future research.