While soil organic carbon (C) is the foundation of productive and healthy ecosystems, the impact of the ecology of microorganisms on C-cycling remains unknown. We manipulated the diversity, applied here as species richness, of the microbial community present in similar soils on two contrasting land-covers—an adjacent pasture and forest—and observed the transformations of plant detritus and soil organic matter (SOM) using stable isotope (¹³C) tracing coupled with a novel nuclear magnetic resonance (NMR) experiment. The amount of detritus-C degraded was not affected by the microbial diversity (p > 0.05), however the fate of detritus- and SOM-C across the diversity gradient was complex and land cover-dependent. For example, in the pasture soil, higher diversity led to lower CO₂ production (p = 0.001), a trend driven solely by SOM-C mineralization. There was no relationship between diversity and detritus-C mineralization or production of new mineral-associations after one year (p > 0.05). In contrast, in the forest soil higher diversity resulted in increased detritus-C (p = 0.01) and SOM-C (p = 0.0008) mineralization and decreased mineral-associated organic matter formation (p = 0.02). In both land cover types, retention efficiency—a measure that integrates both microbial physiology and the ability of the ecosystem to retain C—explained C loss and transformation trends. Overall, this demonstrates that the trajectory of C gained and lost is altered by land management-induced changes to microbial communities, soil structure, and chemical characteristics underlying SOM persistence.