The objective of this study was to survey the soil and assess the functional microbial diversity in relation to soil physicochemical characteristics and land uses of a representative watershed basin in the NW coastal region of Egypt. The area is classified, on basis of remote sensing as well as GIS facilities, into four (4) major landforms i.e. coastal plain, wadi course, piedmont plain, and plateau table land. Twenty soil profiles, representing those landforms, were morphologically described, their physical and chemical characteristics and land uses were determined; and their diagnostic characteristics were assessed. Results indicated that soils generally belong to the order Entisols and could be placed, at sub-group level, to Typic Torrifluvents, Typic Torriorthents, and Lithic Torrorthents. Also, Topsoil samples were collected from the mentioned twenty sites and evenly distributed over the entire watershed. They were analyzed for physical and chemical characteristics and the colony forming units (cfu) of nitrogen fixers, phosphate solublizers, and cellulose, protein and starch decomposers were estimated. Soil enzyme activities (dehydrogenase, nitrogenase, urease, protease, cellulose, amylase and phosphatase) were determined and Shannon and Simpson's diversity indices were used. The results based on statistical analysis showed significant correlation between “the studied soil characteristics and land uses" and “soil microbial groups and enzyme activities" of the study area. The findings of Shannon and Simpson indices of the studied microbial groups and enzyme activities indicated that the coastal plain soils have moderate functional diversity, soils of wadi course and piedmont plain have the largest functional diversity, and the lowest diversity indices were recorded in soils of the plateau table land. Correlation analysis showed that land uses was positively correlated with urease activity and negatively correlated with nitrogenase activity. In addition, microbial activities and population were negatively affected by gravel, calcium carbonate, hydrogen ion and salinity and positively affected by organic matter. The study outputs could support sustainable land management and participatory agricultural development process for rainfed agriculture in Egypt.