Plant diversity strongly influences ecosystem functions and services, such as soil carbon storage. However, the mechanisms underlying the positive plant diversity effects on soil carbon storage are poorly understood. We explored this relationship using long-term data from a grassland biodiversity experiment (The Jena Experiment) and radiocarbon (14C) modelling. Here we show that higher plant diversity increases rhizosphere carbon inputs into the microbial community resulting in both increased microbial activity and carbon storage. Increases in soil carbon were related to the enhanced accumulation of recently fixed carbon in high-diversity plots, while plant diversity had less pronounced effects on the decomposition rate of existing carbon. The present study shows that elevated carbon storage at high plant diversity is a direct function of the soil microbial community, indicating that the increase in carbon storage is mainly limited by the integration of new carbon into soil and less by the decomposition of existing soil carbon.