Soil water repellency (SWR), the reduced affinity of soil for water, is a phenomenon that affects soils globally. With worsening climate change, SWR is expected to increase emphasizing the need to understand the mechanisms driving SWR development and persistence. The importance of the soil microbes in SWR has been postulated for decades, but limited research has been conducted into whole-community interactions and the role of community metabolic activity. To address this gap in knowledge, we investigated the direct effect of microbial community composition, activity, and diversity, as well as their associated metabolites on the development and persistence of SWR by inoculating microcosms containing model soils with 15 different microbial communities and quantified respiration and SWR over time. Six communities that consistently produced either a hydrophobic or hydrophilic phenotype were characterized using metagenomics and metabolomics to determine the impact of microbial and metabolite composition and diversity on SWR. We identified several bacterial genera with significant changes in abundance between SWR phenotypes including and in hydrophilic and and in hydrophobic. We discovered that hydrophilic communities were more positively connected when compared to hydrophobic communities, which could be due to an increase in defense mechanism genes. Additionally, we identified specific metabolites associated with hydrophilic and hydrophobic phenotypes including an increase in the osmolyte ectoine in hydrophilic and an increase in plant-derived decomposition products in hydrophobic communities. Finally, our research suggests that fungi, previously thought to cause hydrophobicity, may actually contribute to hydrophilicity through their preferential consumption of hydrophobic compounds.