Abstract There is growing awareness of the need for regenerative practices in the fight against biodiversity loss and climate change. Yet, we lack a mechanistic understanding of how microbial community composition and functioning are likely to change alongside transition from high-density tillage to large-scale vegetation restoration. Here, we investigated the functional dynamics of microbial communities following a complete vegetation successional chronosequence in a subtropical zone, Southwestern China, using shotgun metagenomics approaches. The contents of total soil phosphorus (P), available P, litter P, and microbial biomass P decreased significantly during vegetation succession indicating that P is the most critical limiting nutrient. The abundance of genes related to P-uptake and transport, inorganic P-solubilization, organic P-mineralization, and P-starvation response regulation significantly increased with successional time, indicating an increased microbial “mining” for P under P limitation. Multi-analysis demonstrated microbial P limitation strongly inhibits carbon (C) catabolism potential, resulting in a significant decrease in CAZyme family gene abundances. Nevertheless, over successional time, microorganisms increased investment in genes involved in degradation-resistant compounds (lignin and its aromatic compounds) to acquire P resources in the litter. Our study provides functional gene-level insights into how P limitation during vegetation succession in subtropical regions inhibits soil microbial C metabolic processes, thereby advancing our understanding of belowground C cycling and microbial metabolic feedback during forest restoration.