Tall fescue (Festuca arundinacea Schreb.) is an important cool‐season perennial forage for cattle production in the humid regions of the USA and throughout the world. While endophyte (Neotyphodium coenophialum Glenn, Bacon, & Hanlin) infection of tall fescue has many benefits, it also results in accumulation of toxic alkaloids in leaf tissue known to cause animal health disorders when ingested. We hypothesized that pastures containing these alkaloids may alter soil organic matter dynamics. A set of three grazed field experiments representing low (0–29%) and high (65–94%) endophyte infection of tall fescue was evaluated at the end of either 8 or 15 yr. Soil samples from 12 paddocks (0.7–0.8 ha) were collected at depths of 0 to 25, 25 to 75, 75 to 150, and 150 to 300 mm. Soil under tall fescue with high endophyte infection had 13 ± 8% greater concentrations of soil organic C and N and particulate organic N to a depth of 150 mm than with low endophyte infection. However, with high endophyte infection, microbial biomass and basal soil respiration per unit of soil organic C or particulate organic C were 86 ± 5% of those with low endophyte infection. Only small differences in soil microbial community structure, estimated via fatty acid methyl ester profiles, were observed between soils under fescue with 0 and 100% endophyte infection. Endophyte infection of tall fescue may perform an important ecological function, allowing more soil organic C and N to accumulate, perhaps because of reduced soil microbial activity on plant residues containing endophyte byproducts.