Carbon exchange in drylands is typically low, but during significant rainfall events (wet anomalies) drylands act as a C sink. During these anomalies the limitation on C uptake switches from water to nitrogen. In the Namib Desert of southern Africa, the N inventory in soil organic matter available for mineralisation is insufficient to support the observed increase in primary productivity. The C4 grasses that flourish after rainfall events are not capable of N fixation, and so there is no clear mechanism for adequate N fixation in dryland ecosystems to support rapid C uptake. Here we demonstrate that N fixation by photoautotrophic hypolithic communities forms the basis for the N budget for plant productivity events in the Namib Desert. Stable N isotope (δ15N) values of Namib Desert hypolithic biomass, and surface and subsurface soils were measured over 3 years across dune and gravel plain biotopes. Hypoliths showed significantly higher biomass and lower δ15N values than soil organic matter. The δ15N values of hypoliths approach the theoretical values for nitrogen fixation. Our results are strongly indicative that hypolithic communities are the foundation of productivity after rain events in the Namib Desert and are likely to play similar roles in other arid environments.