In view of recent discussions about climate change and the anthropogenically enhanced greenhouse effect, the aim of this study was to determine the short-term carbon (C) dynamics in a grassland soil after slurry application. It is known that, depending on cultivation practices, agro-ecosystems can act either as sources or as sinks for atmospheric CO2. C3 and C4 slurries were applied, differing in their stable C isotope signature, to be able to differentiate between native (soil-inherent) and fresh (slurry-applied) C. Samples were taken from 0–2, 2–7.5 and 7.5–15 cm soil depths from 90 days before until 4 weeks after slurry application at various intervals. We carried out compound-specific stable isotope analysis (CSIA) of plant- (arabinose and xylose) and microbial-derived sugars (fucose and rhamnose). Up to 45% of the applied slurry-derived xylose was found in the 0–2 cm soil depth within 24 h after slurry application, with this figure decreasing rapidly and then increasing again towards the end of the experiment. Therefore, during the first phase of slurry incorporation, preferentially the soluble part of slurry entered the first 2 cm of soil while, after about 2 weeks, particulate slurry-derived organic matter was incorporated into the soil. The ratio between plant- and microbial-derived sugars together with δ13C values of individual sugars in the 2–7.5 cm soil depth revealed that the dissipation of sugars from the 0–2 cm soil depth was not only due to leaching, but also was caused by microbial degradation of the fresh C because slurry did not contain significant amounts of rhamnose while the δ13C values of rhamnose became progressively enriched in 13C during the experiment. Stable isotope measurements of bulk soil previously only showed significant differences between C4 and C3 plots at 0–2 cm soil depth. The CSIA of the individual sugars was much more sensitive than bulk isotope measurements, revealing significant differences between C4 and C3 plots even at the 2–7.5 cm soil depth during the first phase of the experiment. Additionally, the dynamics of slurry-derived plant and microbial sugars could be followed specifically. Copyright © 2005 John Wiley & Sons, Ltd.