The sustainability of shifting cultivation and slash and burn continues to be a topic of discussion. Shifting cultivation can be an environmentally friendly analog to the natural processes of disturbance and regenerative succession in tropical forests. The Amerindian population achieved long lasting improvements to notoriously infertile tropical soils by long-term mulching, frequent burning and the application of charcoal and ash which increased soil pH and thereby suppressed aluminium (Al) activity favourable for specific microorganisms responsible for the darkening of these soils (Terra Preta de Índio). Its fertility is most likely linked to an anthropogenic accumulation of P, calcium (Ca) as bones and black carbon (C) as charcoal. Charcoal persists in the environment over centuries and is responsible for the stability of the Terra Preta's soil organic mater (SOM). Our objectives were: (i) To assess the role of charcoal in the sustained soil fertility of Terra Preta. (ii) To find practical ways for Amazonian colonists to improve soil fertility and reduce CO2 emissions by producing charcoal for soil amelioration purposes out of woody biomass instead of burning it. Therefore we studied the effects of charcoal on soil chemistry, and on the microbial population in field and greenhouse experiments. We measured substrate induced respiration (SIR) in order to assess the microbial biomass, activity and population growth potential in charcoal amended soil as well as in Terra Preta, thus providing reliable information about the soil?s fertility and SOM stability. All experiments together showed significantly (p < 0.05) decreased levels of available Al and acidity. A strong correlation between microbial population growth potential, plant biomass production and nutrient availability was found in short and long cropping cycles (annual and perennial crops), proving the suitability of SIR to provide reliable information about soil fertility. Charcoal decreased the ratio of microbial C to soil C (Cmic/Corg) due to its refractory nature, whereas chicken manure increased this ratio (p = 0.017) in a study comparing organic and inorganic fertilization of perennial crops. In this study charcoal increased pH, total nitrogen, availability of sodium, zinc, manganese, copper, and humidity, and decreased Al and acidity only in the mineral fertilized plantation. This caused a significantly increase in basal respiration (BR) and microbial efficiency in terms of CO2-C release per microbial carbon in the soil. The microbial biomass, efficiency and population growth after substrate addition was significantly heightened with increasing levels of organic fertilizer amendments, because the organic amendments increased the soil nutrient content and availability. In the mineral fertilized treatment a significant negative correlation was found between the soil's C content and microbial biomass per soil C content (Cmic/Corg). Such a correlation was not possible in the case of organic fertilization. The factor chicken manure increased the Cmic/Corg ratio significantly (p = 0.017). We suppose that this difference is due do the recalcitrance and little available nutrient contents of charcoal in contrast to easily degradable and nutrient rich chicken manure. The BR, microbial biomass, population growth and the microbe?s efficiency, expressed by the metabolic quotient as CO2 production per microbial biomass unit, increased linearly and significantly with increasing charcoal concentrations (50, 100 and 150 g/kg soil) in a laboratory experiment with only short incubation time of charcoal. After long time exposure of charcoal in a field trial the BR was not increased after the second and fourth cropping cycle due to charcoal application, but the charcoal containing and mineral fertilized soil had significantly higher microbial reproduction rates than fertilized soil alone after glucose additions. This indicates a low biodegradable SOM content but sufficient soil nutrient contents to support microbial population growth if an easily degradable substrate (such as glucose) becomes available. This difference between low soil respiration and high microbial population growth potential is one of the characteristics of Terra Preta.