Climate models all suggest that increasing temperature will create a more “energetic” water cycle, with more intense droughts and potentially more frequent and intense drying/rewetting events. As winter snowpacks decline in some areas, freeze-thaw events may also become more common. These episodic events have long been known to cause pulses of respiration and N loss from soils. Even though many microbes appear to be able to acclimate to and survive such stresses, doing so involves complex physiological mechanisms that create potentially large costs in terms of C and N. For example, to survive a single drought event, microbes must accumulate osmoprotectants to levels greater than 10% of cell mass. When these numbers are extrapolated up to whole ecosystems, they can be equivalent to total C and N costs of as much as 20 g C and 0.75 g N/m², values equivalent to ca. 5 % of annual net primary production and 10-40% of annual net N mineralization in a grassland ecosystem. I will discus the nature of the costs associated with stress tolerance, starting from the level of the individual cell and scaling up to how those costs may regulate ecosystem C and N flows under conditions of changing climate.