The encroachment of shrubs into grasslands is common in terrestrial ecosystems dominated by grass. Land abandonment and favourable climatic trends in recent decades have favoured the expansion of shrubs into subalpine grasslands in many mountainous regions across Europe. The advance of the succession from grassland to shrubland is expected to have a major impact on ecosystem functioning. We used DNA metabarcoding to assess whether the structure of soil fungal communities varied along the succession from subalpine grassland to shrubland in the Pyrenees, and investigated whether shrub encroachment was associated with changes in soil properties. The expansion of shrubs increased the soil C:N ratio and/or reduced the N, P, or K contents. Plant-driven changes in soil properties were strongly associated with the compositional turnover of fungi, including arbuscular mycorrhizal, ectomycorrhizal, ericoid, root endophytic, saprotrophic, lichenised, and pathogenic fungi. Total richness and the richness of most functional groups were correlated with soil P, N, and the C:N or N:P ratios. We show that the interplay between abiotic factors (changes in soil properties) and biotic factors (occurrence and identity of shrubs) played a key role in the structure and uniqueness of soil fungal communities along the succession.