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Abstract Although microbes are the major agent of wood decomposition - a key component of the carbon cycle - the degree to which microbial community dynamics affect this process is unclear. One key knowledge gap is the extent to which stochastic variation in community assembly, e.g. due to historical contingency, can substantively affect decomposition rates. To close this knowledge gap, we manipulated the pool of microbes dispersing into laboratory microcosms using rainwater sampled across a transition zone between two vegetation types with distinct microbial communities. Because the laboratory microcosms were initially identical this allowed us to isolate the effect of changing microbial dispersal directly on community structure, biogeochemical cycles and wood decomposition. Dispersal significantly affected soil fungal and bacterial community composition and diversity, resulting in distinct patterns of soil nitrogen reduction and wood mass loss. Correlation analysis showed that the relationship among soil fungal and bacterial community, soil nitrogen reduction and wood mass loss were tightly connected. These results give empirical support to the notion that dispersal can structure the soil microbial community and through it ecosystem functions. Future biogeochemical models including the links between soil microbial community and wood decomposition may improve their precision in predicting wood decomposition.