Plant-soil feedbacks (PSFs) may determine plant-species coexistence. They may stabilize coexistence, but frequently destabilize it by increasing fitness differences between species. Most studies focus on pairwise models in greenhouses. Thus, whether PSFs favor or deter coexistence is still unclear, especially in multispecies field contexts. We analyzed pairwise and multispecies coexistence over a hydric gradient in a semiarid grassland. Using PSF strength estimates between 17 species, we measured stability and fitness differences between all species pairs, and built all possible multispecies communities to test computationally whether they were stabilized by PSFs. We analyzed whether coexistence probability diminishes with species richness, as previously hypothesized. Because PSFs change with environmental conditions, we investigated their contribution to overall diversity maintenance over the hydric gradient. Strong PSF increased fitness differences, hindering pairwise coexistence. As expected, the probability that an assemblage was stable diminished with its richness, with the largest stable community containing 12 of the 17 species. However, all species coexisted with others in at least one assemblage, highlighting the importance of multispecies analyses. Positive PSFs promoted coexistence in pairwise analyses, but were associated with species-poor communities. Contrastingly, negative PSFs predominated in species-rich associations, perhaps due to indirect positive interactions (an "enemy of my enemy is my friend" scenario) that are known to maintain diversity in this grassland. Changes in the density of different species over the hydric gradient predicted from PSF-stabilized communities matched observations in nature. This seems to promote species turnover and thus coexistence along the gradient. As such, the interplay between environmental conditions and PSFs may be an important driver of diversity. Our results emphasize the need to move beyond pairwise coexistence models. In multispecies systems, crucial indirect interactions may arise. The interplay between environment and PSF under field conditions may provide important insights into coexistence in nature.