The immense diversity of microbial life found in the vadose zone reflects the extremely heterogeneous and highly dynamic aquatic and chemical environments formed within soil pore spaces. The notion of planktonian free swimming microbes is unrealistic under most unsaturated conditions. Experimental and theoretical evidence suggests that surface attachment is the prevailing lifestyle, where bacterial colonies are embedded in biosynthesized extracellular polymeric substances (EPS). This strategy represents a successful adaptation to the variable and unpredictable hydration conditions near the earth surface. The EPS matrix serves as the interface with the environment; it enhances hydration and transport properties in the immediate vicinity of microbial cells, and dampens effects of highly transient fluctuations in water and nutrient fluxes. The primary effect of soil pore geometry and hydration status is on diffusion pathways to and away from stationary microbial colonies. Microbial dependency on diffusion processes occurs at all scales, but is particularly important at the colony scale. We illustrate the critical role of diffusion pathways with their complex spatial and temporal patterns in promoting coexistence and diversity. We review specific features and adaptations of microbial life to the particular conditions of terrestrial soil environments. The physical and related chemical conditions that shape microbial habitats and govern key processes in unsaturated soils are reviewed in a quantitative framework. Key physiological adaptations and biological responses to challenges presented by unsaturated conditions are discussed. Finally, we discuss potential impacts of microbial activity on properties and characteristics of the host porous medium. This review is an attempt to establish an interdisciplinary dialogue between hydrologists and microbiologists towards a quantitative integration of the role of hydrologic conditions on microbial activity and the role of microbiology in controlling macroscopic fluxes within this important compartment of the biosphere.