Boreal forests contain significant quantities of soil carbon that may be oxidized to CO2 given future increases in climate warming and wildfire behavior. At the ecosystem scale, decomposition and heterotrophic respiration are strongly controlled by temperature and moisture, but we questioned whether changes in microbial biomass, activity, or community structure induced by fire might also affect these processes. We particularly wanted to understand whether postfire reductions in microbial biomass could affect rates of decomposition. Additionally, we compared the short-term effects of wildfire to the long-term effects of climate warming and permafrost decline. We compared soil microbial communities between control and recently burned soils that were located in areas with and without permafrost near Delta Junction, AK. In addition to soil physical variables, we quantified changes in microbial biomass, fungal biomass, fungal community composition, and C cycling processes (phenol oxidase enzyme activity, lignin decomposition, and microbial respiration). Five years following fire, organic surface horizons had lower microbial biomass, fungal biomass, and dissolved organic carbon (DOC) concentrations compared with control soils. Reductions in soil fungi were associated with reductions in phenol oxidase activity and lignin decomposition. Effects of wildfire on microbial biomass and activity in the mineral soil were minor. Microbial community composition was affected by wildfire, but the effect was greater in nonpermafrost soils. Although the presence of permafrost increased soil moisture contents, effects on microbial biomass and activity were limited to mineral soils that showed lower fungal biomass but higher activity compared with soils without permafrost. Fungal abundance and moisture were strong predictors of phenol oxidase enzyme activity in soil. Phenol oxidase enzyme activity, in turn, was linearly related to both 13C lignin decomposition and microbial respiration in incubation studies. Taken together, these results indicate that reductions in fungal biomass in postfire soils and lower soil moisture in nonpermafrost soils reduced the potential of soil heterotrophs to decompose soil carbon. Although in the field increased rates of microbial respiration can be observed in postfire soils due to warmer soil conditions, reductions in fungal biomass and activity may limit rates of decomposition.