Thinning is an important forest management practice to mitigate the adverse effects of increased drought on tree growth and productivity. However, the responses of the soil microbial community and its functions to thinning and drought have received little attention in planted forests. In this study, we assessed the combined effects of thinning (30% and 45% of trees removed) and precipitation reduction (− 30%) on soil fungal and bacterial communities and the multifunctionality associated with carbon, nitrogen, and phosphorus cycling during one growing season (from April to September) in a 16-year-old larch plantation. We found that 45% thinning, but not 30%, significantly increased soil multifunctionality during the growing season (except for April and May) and fungal diversity in June. In contrast, precipitation reduction significantly decreased soil multifunctionality during the growing season and fungal diversity in June. Thinning also considerably suppressed the relative abundance of ectomycorrhizal (ECM) fungi during the growing season, whereas precipitation reduction significantly increased the relative abundance of ECM fungi in June and July. Furthermore, soil multifunctionality was more related to ECM and saprotrophic fungal communities than to bacterial communities. Our results suggest that a high thinning level can mitigate the negative effect of precipitation reduction on soil multifunctionality and fungal diversity, and this effect depends on the sampling month. Therefore, thinning is recommended as a tool to mitigate the impact of precipitation reduction on soil multifunctionality and the microbial community in larch plantations.