Low-diversity ecosystems cover large portions of the Earth's land surface, yet studies of climate change on ecosystem functioning typically focus on temperate ecosystems, where diversity is high and the effects of individual species on ecosystem functioning are difficult to determine. We show that a climate-induced decline of an invertebrate species in a low-diversity ecosystem could contribute to significant changes in carbon (C) cycling. Recent climate variability in the McMurdo Dry Valleys of Antarctica is associated with changes in hydrology, biological productivity, and community composition of terrestrial and aquatic ecosystems. One of the greatest changes documented in the dry valleys is a 65% decrease in the abundance of the dominant soil invertebrate (Scottnema lindsayae, Nematoda) between 1993 and 2005, illustrating sensitivity of biota in this ecosystem to small changes in temperature. Globally, such declines are expected to have significant influences over ecosystem processes such as C cycling. To determine the implications of this climate-induced decline in nematode abundance on soil C cycling we followed the fate of a 13C tracer added to soils in Taylor Valley, Antarctica. Carbon assimilation by the dry valley nematode community contributed significantly to soil C cycling (2–7% of the heterotrophic C flux). Thus, the influence of a climate-induced decline in abundance of a dominant species may have a significant effect on ecosystem functioning in a low-diversity ecosystem.