El Niño–La Niña cycles strongly influence dry and wet seasons in the tropics and consequently nitrous oxide (N2O) emissions from tropical rainforest soils. We monitored whole‐system and soil chamber N2O fluxes during 5‐month‐long droughts in the Biosphere 2 tropical forest to determine how rainfall changes N2O production. A consistent pattern of N2O flux changes during drought and subsequent wetting emerged from our experiments. Soil surface drying during the first days of drought, presumably increased gas transport out of the soil, which increased N2O fluxes. Subsequent drying caused an exponential decrease in whole‐system (4.0±0.1% day−1) and soil chamber N2O flux (8.9±0.8% day−1; south chamber; and 13.7±1.1% day−1; north chamber), which was highly correlated with soil moisture content. Soil air N2O concentration ([N2O]) and flux measurements revealed that surface N2O production persisted during drought. The first rainfall after drought triggered a N2O pulse, which amounted to 25% of drought‐associated reduction in N2O flux and 1.3±0.4% of annual N2O emissions. Physical displacement of soil air by water and soil chemistry changes during drought could not account for the observed N2O pulse. We contend that osmotic stress on the microbial biomass must have supplied the N source for pulse N2O, which was produced at the litter–soil interface. After the pulse, N2O fluxes were consistently 90% of predrought values. Nitrate change rate, nutrient, [N2O], and flux analyses suggested that nitrifiers dominated N2O production during the pulse and denitrifiers during wet conditions. N2O flux measurements in Biosphere 2, especially during the N2O pulse, demonstrate that large‐scale integration methods, such as flux towers, are essential for improving ecosystem N2O flux estimates.