Purpose: The residual phosphorus (P) in Hedley’s sequential fractionation procedure is considered to be a relatively stable soil P pool and unavailable for plant uptake. In the present study, we investigated the effect of wetting-drying events on the dynamics of the residual soil P fraction in a flooded rice and aerobic wheat rotation. Methods: Soils were taken from a long-term field trial after flooded (rice), and aerobic (wheat) crops were harvested. Hedley’s sequential fractionation method was used to assess the distribution of various P fractions. These changes in these P fractions were then related to Fe cycling in the soil. Results: The residual P (H2SO4-H2O2 digested) was the dominant P fraction (37–51% of total P) in the aerobic soil under wheat, while it was decreased by 18–27% in flooded soil under rice cultivation. In contrast, the sparingly soluble Ca-bound P (HCl-Pi) increased from 25–31% under wheat cultivation to 41–50% under flooded rice (paddy) cultivation where reducing conditions are expected to prevail under submerged paddy soil conditions. The crop rotation not only altered the sparingly available P fraction but also influenced soil labile P, especially the organic P form. Compared with the rice soil, a 4-fold increase in the labile P fraction (NaHCO3-Po) was observed in wheat soil. The moderately labile P fraction (NaOH-extractable) showed a similar trend to that of labile P pool, but the increased NaOH-Po in wheat soil was relatively small. The relatively rapid change in the residual P fraction was attributed to oxidation-reduction cycles of Fe oxides between flooded (rice) and aerobic (wheat) soil conditions. Conclusions: Wetting and drying cycles associated with a rice-wheat crop rotation promoted the transformation of the sparingly soluble soil P fraction between crops, which was attributed to changes in soil redox conditions, particularly Fe cycling. This indicated that the rice-wheat crop rotation can draw upon the sparingly soluble P fraction for crop production, thus relying less on fertilizer-applied P.