Perennial crops in agricultural systems can increase sustainability and the magnitude of ecosystem services, but yield may depend upon biotic context, including soil mutualists, pathogens and cropping diversity. These biotic factors themselves may interact with abiotic factors such as drought. We tested whether perennial crop yield depended on soil microbes, water availability and crop diversity by testing monocultures and mixtures of three perennial crop species: a novel perennial grain (intermediate wheatgrass-Thinopyrum intermedium-- that produces the perennial grain Kernza®), a potential perennial oilseed crop (Silphium intregrifolium), and alfalfa (Medicago sativa). Perennial crop performance depended upon both water regime and the presence of living soil, most likely the arbuscular mycorrhizal (AM) fungi in the whole soil inoculum from a long term perennial monoculture and from an undisturbed native remnant prairie. Specifically, both Silphium and alfalfa strongly benefited from AM fungi. The presence of native prairie AM fungi had a greater benefit to Silphium in dry pots and alfalfa in wet pots than AM fungi present in the perennial monoculture soil. Kernza did not benefit from AM fungi. Crop mixtures that included Kernza overyielded, but overyielding depended upon inoculation. Specifically, mixtures with Kernza overyielded most strongly in sterile soil as Kernza compensated for poor growth of Silphium and alfalfa. This study identifies the importance of soil biota and the context dependence of benefits of native microbes and the overyielding of mixtures in perennial crops.