A diverse soil microbial community is involved in nitrogen cycling, and these microbes can be affected by land management practices and weed invasion. We surveyed 20 woodlands with a history of livestock grazing, with livestock recently excluded from 10 sites. We investigated whether soil nutrients were lower when grazing was excluded and higher when exotic grasses dominated the understory. Second, using quantitative real-time PCR, we investigated whether microbial nitrogen functional gene (NFG) abundance was altered with soil nutrient enrichment, livestock exclusion, and exotic grass invasion. The target genes were chiA (decomposition-ammonification), nifH (nitrogen fixation), nirK and narG (denitrification), and bacterial amoA (nitrification). Woodland soils were enriched in phosphorus and nitrogen compared to reference condition sites, but soil nutrients were not lower following livestock exclusion. Total nitrogen and nifH were negatively correlated in grazed woodlands, suggesting that aboveground herbivory reduces the capacity for belowground nitrogen fixation. Woodlands dominated by exotic grasses had higher levels of nitrate, narG, and nirK than those dominated by native grasses. We hypothesize that the increase in potential for denitrification was due to increases in soil nitrate, rather than changes in plant composition. Overall, soil physicochemistry explained more variation in NFG abundance than livestock presence or plant invasion, particularly for chiA and bacterial amoA, with significant relationships between the abundance of all five NFGs and total nitrogen or nitrate. All woodlands investigated had a history of anthropogenic disturbance and nutrification, and soil nutrient levels and the abundance of NFGs are likely to be related to long-term land management practices.