Soils are the largest repository of organic carbon (C) in the terrestrial biosphere and represent an important source of carbon dioxide (CO 2 ) to the atmosphere, releasing 60–75 Pg C annually through microbial decomposition of organic materials1,2. A primary control on soil CO 2 flux is the efficiency with which the microbial community uses C. Despite its critical importance to soil–atmosphere CO 2 exchange, relatively few studies have examined the factors controlling soil microbial efficiency. Here, we measured the temperature response of microbial efficiency in soils amended with substrates varying in lability. We also examined the temperature sensitivity of microbial efficiency in response to chronic soil warming in situ. We find that the efficiency with which soil microorganisms use organic matter is dependent on both temperature and substrate quality, with efficiency declining with increasing temperatures for more recalcitrant substrates. However, the utilization efficiency of a more recalcitrant substrate increased at higher temperatures in soils exposed to almost two decades of warming 5 °C above ambient. Our work suggests that climate warming could alter the decay dynamics of more stable organic matter compounds, thereby having a positive feedback to climate that is attenuated by a shift towards a more efficient microbial community in the longer term.