Whilst largely considered an inert material, biochar has been documented to contain a small yet significant fraction of microbially available labile organic carbon (C). Biochar addition to soil has also been reported to alter soil microbial community structure, and to both stimulate and retard the decomposition of native soil organic matter (SOM). We conducted a short-term incubation experiment using two (13)C-labelled biochars produced from wheat or eucalypt shoots, which were incorporated in an aridic arenosol to examine the fate of the labile fraction of biochar-C through the microbial community. This was achieved using compound specific isotopic analysis (CSIA) of phospholipid fatty acids (PLFAs). A proportion of the biologically-available fraction of both biochars was rapidly (within three days) utilised by gram positive bacteria. There was a sharp peak in CO2 evolution shortly after biochar addition, resulting from rapid turnover of labile C components in biochars and through positive priming of native SOM. Our results demonstrate that this CO2 evolution was at least partially microbially mediated, and that biochar application to soil can cause significant and rapid changes in the soil microbial community; likely due to addition of labile C and increases in soil pH.