Variability in the magnitude and timing of precipitation is predicted to change under future climate scenarios. The primary objective of this study was to understand how variation in precipitation patterns consisting of soil moisture pulses mixed with intermittent dry down events influence ecosystem gas fluxes. We characterized the effects of precipitation amount and timing, N availability, and plant community composition on whole ecosystem and leaf gas exchange in a California annual grassland mesocosm study system that allowed precise control of soil moisture conditions. Ecosystem CO2 and fluxes increased significantly with greater precipitation and were positively correlated with soil moisture. A repeated 10 day dry down period following 11 days of variable precipitation inputs strongly depressed net ecosystem CO2 exchange (NEE) across a range of season precipitation totals, and plant community types. Ecosystem respiration (Re), evapotranspiration (ET) and leaf level photosynthesis (Amax) showed greatest sensitivity to dry down periods in low precipitation plots. Nitrogen additions significantly increased NEE, Re and Amax, particularly as water availability was increased. These results demonstrate that N availability and intermittent periods of soil moisture deficit (across a wide range of cumulative season precipitation totals) strongly modulate ecosystem gas exchange.