Summary Long‐term soil chronosequences provide natural soil fertility gradients that can be used to explore linkages between soils and plant community composition and diversity. Well‐studied forested soil chronosequences have revealed that local (α) plant diversity increases with greater soil age and declining fertility, but corresponding changes in species turnover and beta (β) diversity have not been explored, particularly in extremely species‐rich regions. We quantified changes in plant species diversity and community composition, and identified the edaphic drivers of these changes, along a >2‐million year retrogressive dune chronosequence in the south‐west Australia biodiversity hotspot. We found greater plant species diversity across all growth forms as soil development proceeded and concentrations of soil nutrients, particularly phosphorus (P), diminished to extremely low levels (surface soil total P concentrations of 6 mg P kg−1). Despite the high plant α diversity on older nutrient‐impoverished soils, species turnover across the chronosequence was exceptionally high when all growth forms were considered (mean of 1% of species shared between the youngest and oldest soils), and there was complete turnover of woody species along the chronosequence. Such extreme species turnover across the chronosequence reflected large changes in soil chemical properties. In addition, β diversity within individual chronosequence stages increased with declining soil fertility. Shrubs remained the dominant and most speciose growth form throughout the chronosequence. Synthesis. The large increase in plant α diversity and the extreme species turnover associated with declining soil fertility highlight the central role of soil properties in driving plant community assembly during long‐term ecosystem development, previously only reported from comparatively species‐poor regions. Our finding that plant β diversity increased with declining soil fertility points to a novel mechanism whereby extremely low soil fertility, rather than high productivity, promotes high β diversity. These results suggest that the interaction of an exceptionally diverse plant species pool and nutrient‐impoverished soils provides the basis for the maintenance of such high β diversity at extremely low soil fertility.