Ectomycorrhizal (EcM) fungi are essential for the growth and development of many temperate tree species. One major function of EcM fungi is the recovery of nutrients from organic pools for translocation to the host tree. The distinct rhizomorph and hyphal mats formed by specialized species of EcM fungi are significant features of the organic and mineral soil horizons of coniferous forests throughout the Pacific Northwest. As part of an ongoing NSF-funded Microbial Observatory at the H.J. Andrews Experimental Forest in western Oregon, we are determining the microbial community structure and function of EcM mats in a Douglas-fir-dominated forest ecosystem in the context of nitrogen (N) cycling. Among our early findings were significantly increased N-acetylglucosaminidase (NAGase) activities associated with the dominant types of EcM mat morpho- and phylotypes. Although frequently attributed to chitin decomposition, NAGase can also be involved in the hydrolytic breakdown of gram positive bacterial cell walls. In addition to facilitating access to the nutrient rich cytoplasmic residues, hydrolysis of the nitrogen-rich peptidoglycan also represents an available N source. Using commercially available lyophilized Micrococcus lysodeikticus cells as a substrate, we have found measurable lysozyme activities in both EcM mats and in adjacent forest floor and mineral soils without obvious mat development. Differences between activities in EcM mat and non-mat samples vary with mat structure and EcM fungal species. These results suggest both an alternative interpretation for soil NAGase activity, and that the turnover of bacterial cell wall polymers may represent a hitherto unexplored aspect of the forest nitrogen cycle.