We studied key mechanisms and drivers of soil functioning by analyzing soil respiration and enzymatic activity in Mediterranean holm oak forest fragments with different influence of the agricultural matrix. For this, structural equation models (SEM) were built including data on soil abiotic (moisture, temperature, organic matter, pH, nutrients), biotic (microbial biomass, bacterial and fungal richness), and tree-structure-related (basal area) as explanatory variables of soil enzymatic activity and respiration. Our results show that increased tree growth induced by forest fragmentation in scenarios of high agricultural matrix influence triggered a cascade of causal-effect relations, affecting soil functioning. On the one hand, soil enzymatic activity was strongly stimulated by the abiotic (changes in pH and microclimate) and biotic (microbial biomass) modifications of the soil environment arising from the increased tree size and subsequent soil organic matter accumulation. Soil CO2 emissions (soil respiration), which integrate releases from all the biological activity occurring in soils (autotrophic and heterotrophic components), were mainly affected by the abiotic (moisture, temperature) modifications of the soil environment caused by trees. These results, therefore, suggest that the increasing fragmentation of forests may profoundly impact the functioning of the plant-soil-microbial system, with important effects over soil CO2 emissions and nutrient cycling at the ecosystem level. Forest fragmentation is thus revealed as a key albeit neglected factor for accurate estimations of soil carbon dynamics under global change scenarios.