High levels of atmospheric nitrogen (N) deposition may result in greater terrestrial carbon (C) storage. In a northern hardwood ecosystem, exposure to over a decade of simulated N deposition increased C storage in soil by slowing litter decay rates, rather than increasing detrital inputs. To understand the mechanisms underlying this response, we focused on the saprotrophic fungal community residing in the forest floor and employed molecular genetic approaches to determine if the slower decomposition rates resulted from down-regulation of the transcription of key lignocellulolytic genes, by a change in fungal community composition, or by a combination of the two mechanisms. Our results indicate that across four Acer-dominated forest stands spanning a 500-km transect, community-scale expression of the cellulolytic gene cbhI under elevated N deposition did not differ significantly from that under ambient levels of N deposition. In contrast, expression of the ligninolytic gene lcc was significantly down-regulated by a factor of 2–4 fold relative to its expression under ambient N deposition. Fungal community composition was examined at the most southerly of the four sites, in which consistently lower levels of cbhI and lcc gene expression were observed over a two-year period. We recovered 19 basidiomycete and 28 ascomycete rDNA 28S operational taxonomic units; Athelia, Sistotrema, Ceratobasidium and Ceratosebacina taxa dominated the basidiomycete assemblage, and Leotiomycetes dominated the ascomycetes. Simulated N deposition increased the proportion of basidiomycete sequences recovered from forest floor, whereas the proportion of ascomycetes in the community was significantly lower under elevated N deposition. Our results suggest that chronic atmospheric N deposition may lower decomposition rates through a combination of reduced expression of ligninolytic genes such as lcc, and compositional changes in the fungal community.