Despite the high interest in biochar as soil amendment, the number of field studies is still limited, being experiments with perennial crops in arid lands particularly lacking. This study evaluated the application of compost and biochar in a drip-irrigated organic olive crop in a calcareous soil in South-East Spain. During two consecutive years, changes in soil total organic C (TOC), dissolved organic C (DOC) and water soluble N (WSN), mineral N (NH4 (+) and NO3 (-)), N2O emissions, denitrifying enzyme activity (DEA) and number of amoA gen copies were monitored. Biochar increased TOC compared to the rest of treatments, whereas DOC and WSN significantly increased in plots amended with compost and the compost-biochar mixture. DEA, amoA-encoding genes and N2O emissions were highest with the compost-biochar mixture, but results were not always significant. Our results show that, in these N-limited and deficit irrigated semi-arid agro-ecosystems, compost amendment has an impact on soil microbiological activity with a link to N availability. Biochar applied alone does not alter the N dynamics, but markedly builds-up soil C. In both cases only during the first year these effects were statistically significant. When applied in combination a synergistic effect was observed and the highest values of DEA, amoA gene copies and N2O emissions were detected.