Under conditions of increased fire season length and area affected by fire, stocks of carbon stored in forests are at increased risk of burning. While much research has investigated the immediate loss of above ground and below ground carbon stocks through combustion during a fire, there has been little research on subsequent organic matter cycling in post-fire environments. Fire can introduce new organic matter to the litter layer through the formation of a post-fire litter layer composed of debris from fire induced plant stress or death. This litter may have different chemistry and decomposition dynamics to the pre-fire litter due to the changed pathway from plant to ground and the narrow age range of the debris. In this study, litters collected from two vegetation types (Pinus and Eucalyptus dominated) and from adjacent areas either fire affected (FA) or not fire affected (NFA) were incubated as litter, or as water extracts of litter, in soils to determine fire induced changes in nutrient pools, microbial biomass and microbial activity. Post-fire litters contained more labile C (15 and 30 mg C g native/pine litter−1, respectively) than litters unaffected by fire (4 mg C g litter−1). Increased labile C concentration correlated (r2 > 0.95) with increased microbial activity without a concurrent change in nitrogen (microbial) or phosphorus (resin and microbial) pools. Our results suggest that labile C in post-fire litter can alter microbial carbon cycling and that effects may be more pronounced under pine compared to native forest.