Water repellency can significantly reduce crop and pasture establishment and production in sandy soils. Management practices that increase the rate of water infiltration into dry soils following the first rains at the end of the dry season were investigated. In the laboratory, addition of water to water repellent soil and maintenance of warm moist conditions produced a gradual decline in water repellency. This was supported by results in the field which showed that under daily irrigation there was a gradual decline in water repellency over time. However, under dryland conditions, other mechanisms to increase water infiltration had to be found. In the laboratory, after the addition of lime and kaolinite clay, there was an initial rapid decline in repellency, indicative of a physical mechanism, followed by a more gradual decline suggesting a biological response. In the field, under dryland conditions, the addition of lime and kaolinite clay resulted in a reduction in water repellency, and in the case of lime, this effect increased with the size of application. Estimates of the numbers of wax-degrading bacteria in the treated soils, using a most-probable-number assay, showed at least a 10-fold increase in lime-treated sands, but not in the clay-treated sands. The results suggest that lime may provide a viable alternative for increasing the wettability of soils by physical mechanisms and by promoting microbial activity by bacteria responsible for wax degradation, resulting in more consistent plant germination and establishment, and increased crop yields.