We used a 93-year-old mine waste contamination gradient in alluvial soil to explore the relationship between ecosystem level functioning and community structure in a chronically stressed ecosystem. The sensitivity of broad functional parameters (in situ soil respiration, microbial biomass, above and below ground plant biomass) and microbial diversity [phospholipid fatty acid (PLFA) abundance and richness] were compared. Functional responses were linear with respect to contaminants while thresholds were detected in the community structural response to contamination along the gradient. For example, in situ soil respiration was negatively and linearly correlated to contamination concentration (R = −0.783, P < 0.01), but changes in microbial community structure only became evident where contaminant concentrations were greater than 28 times above background levels. Our results suggest that functional redundancy does not prevent depression of ecosystem function in the long-term.