Summary Although arbuscular mycorrhizal fungi (AMF) have been assumed to facilitate soil organic carbon (SOC) sequestration, they also regulate SOC decomposition via specific interactions with saprotrophs. We tested AMF hyphal impacts on SOC dynamics (e.g. labile C vs persistent C) under monoculture conditions with different grasses (e.g. Leymus chinensis and Stipa grandis) using an in-growth core method. Although the total SOC pool was unaffected by the presence of AM fungal hyphae, the proportional composition of labile and persistent C within SOC pools differed significantly between treatments with and without hyphal access. The presence of AM fungal hyphae from L. chinensis was associated with increased abundances of actinomycetes and Gram-positive bacteria, alongside the higher activity of polyphenol oxidase that breaks down persistent soil C, leading to a higher proportion of labile C in the SOC pool. Under S. grandis, however, hyphal presence corresponded with a greater abundance of Gram-negative bacteria that often can degrade labile soil C, resulting in a higher proportion of persistent C in the SOC pool. The influence of AM fungal hyphae on SOC depends on the identity of host plants and thus shifts in plant community composition may strongly alter SOC dynamics in grasslands.