Soil microbes dominate processes that regulate soil trace gas emissions and soil C and N dynamics. Intensive management in agroecosystems provides unique opportunities to assess the effectiveness of microbial manipulations to enhance soil C retention and reduce trace gas emissions. While reduced tillage can be conducive to the development of the soil microbial community with fungal dominance and facilitation of soil C retention, direct inhibition of nitrifying bacteria has been shown to effectively reduce N₂O emission and enhance soil N retention. However, it is unclear whether and how inhibition of nitrification affects soil C dynamics. Inhibition of nitrification would increase soil NH₄ and alter plant C allocation to roots and mycorrhizal fungi, potentially affecting organic C inputs to soil and microbial activities. Using wheat as a model plant, we conducted both field and microcosm experiments examining the impact of a nitrification inhibitor (dicyandiamide, DCD) on soil microbes and organic residue decomposition under both ambient and elevated CO₂. Our preliminary results from the microcosm experiment showed that elevated CO₂, but not the nitrification inhibitor, significantly increased mycorrhizal colonization of roots. Inhibition of nitrification appeared to increase soil N retention, but did not affect plant N uptake. The impact of the nitrification inhibitor on residue decomposition and organic C dynamics in soil is being examined.