Hydrochar has emerged as a promising carbonaceous amendment to enhance soil quality, yet its short-term effects on soil carbon (C) and nitrogen (N) dynamics and microbial functioning remain poorly understood. Here, a 77-day greenhouse pot experiment was conducted using a Cambisol cultivated with sunflower (Helianthus annuus L.) under two irrigation regimes simulating well-irrigated (WI) and water-deficit (WD) scenarios. Two doses of chicken manure–derived hydrochar (3.25 and 6.5 t ha⁻¹) and mineral fertilizer (MF) treatments providing equivalent N inputs were evaluated. Hydrochar promoted microbial growth and enhanced enzymatic and respiratory activities despite its low apparent C and nutrient input. After 77 days under WI, the addition of 6.5 t ha-1 hydrochar enhanced the activity of phenol oxidase (POA) and acid phosphomonesterase (AcPA). Concomitantly, the availability of soluble C and N increased, whereas total organic C (TOC) and N decreased relative to the initial values. These responses indicate a hydrochar-induced priming effect. The increase in POA relative to β-glucosidase is in line with a functional shift from a predominant degradation of labile compounds towards an increased oxidation of more complex structures. This interpretation is supported by solid-state ¹³C NMR data, revealing a higher degradation index of the soil organic matter. Under WD, these hydrochar-induced effects were attenuated but not suppressed, emphasizing the interactive influence of moisture and amendment dose. Overall, our results show that hydrochar modulates soil biochemical processes primarily through microbially mediated mechanisms rather than through direct nutrient inputs.