A technique based on progressive fumigation was used to reduce soil microbial biodiversity, and the effects of such reductions upon the stability of key soil processes were measured. Mineral soil samples from a grassland were fumigated with chloroform for up to 24 h and then incubated for 5 months to allow recolonisation by surviving organisms. The diversity of cultivable and non-cultivable bacteria, protozoa and nematodes was progressively reduced by increasing fumigation times, as was the number of trophic groups, phyla within trophic groups, and taxa within phyla. Total microbial biomass was similar within fumigated soils, but lower than for unfumigated soil. There was no direct relationship between biodiversity and function. Some broad-scale functional parameters increased as biodiversity decreased, e.g. thymidine incorporation, growth on added nutrients, and the decomposition rate of plant residues. Other more specific parameters decreased as biodiversity decreased, e.g. nitrification, denitrification and methane oxidation. Thus specific functional parameters may be a more sensitive indicator of environmental change than general parameters. Although fumigation reduced soil microbial biodiversity, there was evidence to suggest that it selected for organisms with particular physiological characteristics. The consequences of this for interpreting biodiversity – function relationships are discussed. The stability of the resulting communities to perturbation was further examined by imposing a transient (brief heating to 40°C) or a persistent (addition of CuSO4) stress. Decomposition of grass residues was determined on three occasions after such perturbations. The soils clearly demonstrated resilience to the transient stress; decomposition rates were initially depressed by the stress and recovered over time. Resilience was reduced in the soils with decreasing biodiversity. Soils were not resilient to the persistent stress, there was no recovery in decomposition rate over time, but the soils with the highest biodiversity were more resistant to the stress than soils with impaired biodiversity. The study of functional stability under applied perturbation is a powerful means of examining the effects of biodiversity.