Soil carbon dynamics and microbial communities are critical to soil health. However, the specific effects of mulching on soil microbial community and carbon dynamics in semi-arid rainfed regions remain insufficiently understood. This study aims to identify optimal mulching practices that promote soil carbon sequestration and enhance soil microbial functionality. Mulching treatments were applied in furrows before maize sowing, including black plastic film (TB), white plastic film (TW), straw mulching without sowing (TC), and straw mulching with sowing (TG), and were compared with flat sowing without mulching (TN). Results revealed that TG treatment promoted soil carbon dynamics by increasing total carbon (9%), organic carbon (19%), microbial biomass carbon (100%), easily oxidized carbon (10%), particulate-associated carbon (77%), carbon stability index (7%), active carbon fraction (45%), dissolved carbon proportion (30%), and microbial quotient (34%) compared to TN. A higher abundance and composition of bacterial communities were observed compared to fungal communities. The highest bacterial abundance of Kaistobacter, iii1_15, Sinobacteraceae, and Xanthomonadaceae, and fungal abundance of unspecified fungi, Laiosphaeriaceae, and Sordariomycetes, with the dominant aerobic respiration metabolic pathway involved in organic matter decomposition, were observed in TG and TC. The results indicated that TG treatment most effectively promoted carbon fractions and microbial activity that could strengthen soil health.