Mutualistic interactions can be just as important to community dynamics as antagonistic species interactions like competition and predation. Because of their large effects on both abiotic and biotic environmental variables, resource mutualisms, in particular, have the potential to influence plant communities. Moreover, the effects of resource mutualists such as nitrogen-fixing rhizobia on diversity and community composition may be more pronounced in nutrient-limited environments. I experimentally manipulated the presence of rhizobia across a nitrogen gradient in early assembling mesocosm communities with identical starting species composition to test how the classic mutualism between nitrogen-fixing rhizobia and their legume host influence diversity and community composition. After harvest, I assessed changes in α-diversity, community composition, β-diversity, and ecosystem properties such as inorganic nitrogen availability and productivity as a result of rhizobia and nitrogen availability. The presence of rhizobia decreased plant community diversity, increased community convergence (reduced β-diversity), altered plant community composition, and increased total community productivity. These community-level effects resulted from rhizobia increasing the competitive dominance of their legume host Chamaecrista fasciculata. Moreover, different non-leguminous species responded both negatively and positively to the presence of rhizobia, indicating that rhizobia are driving both inhibitory and potentially facilitative effects in communities. These findings expand our understanding of plant communities by incorporating the effects of positive symbiotic interactions on plant diversity and composition. In particular, rhizobia that specialize on dominant plants may serve as keystone mutualists in terrestrial plant communities, reducing diversity by more than 40%.