Dispersal plays a prominent role in most conceptual models of community assembly. However, direct measurement of dispersal across a whole community is difficult at ecologically relevant spatial scales. For cryptic organisms, such as fungi and bacteria, the scale and importance of dispersal limitation has become a major point of debate. We use an experimental island biogeographic approach to measure the effects of dispersal limitation on the ecological dynamics of an important group of plant symbionts, ectomycorrhizal fungi. We manipulated the isolation of uncolonized host seedlings across a natural landscape and used a range of molecular techniques to measure the dispersal rates of ectomycorrhizal propagules and host colonization. Some species were prolific dispersers, producing annual spore loads on the order of trillions of spores per km2. However, fungal propagules reaching host seedlings decreased rapidly with increasing distance from potential spore sources, causing a concomitant reduction in ectomycorrhizal species richness, host colonization and host biomass. There were also strong differences in dispersal ability across species, which correlated well with the predictable composition of ectomycorrhizal communities associated with establishing pine forest. The use of molecular tools to measure whole community dispersal provides a direct confirmation for a key mechanism underlying island biogeography theory and has the potential to make microbial systems a model for understanding the role of dispersal in ecological theory.