It has been reported that engineered nanoparticles (ENPs) alter soil bacterial communities, but the underlying mechanisms and environmental controls of such effects remain unknown. Besides direct toxicity, ENPs may indirectly affect soil bacteria by changing soil water availability or other properties. Alternatively, soil water or other environmental factors may mediate ENP effects on soil bacterial communities. To test, we incubated nano-TiO2-amended soils across a range of water potentials for 288 days. Following incubation, the soil water characteristics, organic matter, total carbon, total nitrogen, and respiration upon rewetting (an indicator of bioavailable organic carbon) were measured. Bacterial community shifts were characterized by terminal restriction fragment length polymorphism (T-RFLP). The endpoint soil water holding had been reported previously as not changing with this nano-TiO2 amendment; herein, we also found that some selected soil properties were unaffected by the treatments. However, we found that nano-TiO2 altered the bacterial community composition and reduced diversity. Nano-TiO2-induced community dissimilarities increased but tended to approach a plateau when soils became drier. Taken together, nano-TiO2 effects on soil bacteria appear to be a result of direct toxicity rather than indirectly through nano-TiO2 affecting soil water and organic matter pools. However, such directs effects of nano-TiO2 on soil bacterial communities are mediated by soil water.