In forest ecosystems, ectomycorrhizal and saprotrophic fungi play a central role in the breakdown of soil organic matter (SOM). Competition between these two fungal guilds has long been hypothesized to lead to suppression of decomposition rates, a phenomenon known as the ‘Gadgil effect’. In this review, we examine the documentation, generality, and potential mechanisms involved in the ‘Gadgil effect’. We find that the influence of ectomycorrhizal fungi on litter and SOM decomposition is much more variable than previously recognized. To explain the inconsistency in size and direction of the ‘Gadgil effect’, we argue that a better understanding of underlying mechanisms is required. We discuss the strengths and weaknesses of each of the primary mechanisms proposed to date and how using different experimental methods (trenching, girdling, microcosms), as well as considering different temporal and spatial scales, could influence the conclusions drawn about this phenomenon. Finally, we suggest that combining new research tools such as high‐throughput sequencing with experiments utilizing natural environmental gradients will significantly deepen our understanding of the ‘Gadgil effect’ and its consequences on forest soil carbon and nutrient cycling.

Contents Summary 1382 I. Introduction 1382 II. Documenting the ‘Gadgil effect’ 1383 III. Generality of the ‘Gadgil effect’ 1383 IV. Mechanisms of the ‘Gadgil effect’ 1384 V. Priming and the ‘Gadgil effect’ 1386 VI. Is the ‘Gadgil effect’ context‐dependent? 1387 VII. Future research on the ‘Gadgil effect’ 1389 VIII. Conclusions 1391 Acknowledgements 1391 References 1391