Significance We overcame the difficulty of disentangling biotic and abiotic effects on decomposition by using the largest field-based reciprocal transplant experiment to date. We showed that decomposition responses to climate depend on the composition of microbial communities, which is not considered in terrestrial carbon models. Microbial communities varied in their effects on both mass loss and types of carbon decomposed in an interactive manner not predicted by current theory. Contrary to the traditional paradigm, bacterial communities appeared to have a stronger impact on grassland litter decomposition rates than fungi. Furthermore, bacterial communities shifted more rapidly in response to changing climates than fungi. This information is critical to improving global terrestrial carbon models and predicting ecosystem responses to climate change.