The main change in soil use in Amazonia is, after slash and burn deforestation followed by annual crops, the establishment of pastures. This conversion of forest to pasture induces changes in the carbon cycle, modifies soil organic matter content and quality and affects biological activity responsible for numerous biochemical and biological processes essential to ecosystem functioning. The aim of this study was to assess changes in microbial biomass and activity in fallow and pasture soils after forest clearing. The study was performed in smallholder settlements of eastern Brazilian Amazonia. Soil samples from depths of 0–2, 2–5 and 5–10 cm were gathered in native forest, fallow land 8–10 yr old and pastures with ages of 1–2, 5–7 and 10–12 yr. Once fallow began, soil microbial biomass and its activity showed little change. In contrast, conversion to pasture modified soil microbial functioning significantly. Microbial biomass and its basal respiration decreased markedly after pasture establishment and continued to decrease with pasture age. The increase in metabolic quotient in the first years of pasture indicated a disturbance in soil functioning. Our study confirms that microbial biomass is a sensitive indicator of soil disturbance caused by land-use change.