Our objective was to determine the effects of swine lagoon effluent (SLE)and ammonium nitrate (AN) on soil N supplying capacity and microbial functional groups of N mineralizers and nitrifiers in a forage production system. We collected soils at 0 – 7.5 cm depth in 2004 from field plots planted with Bermuda and Tall fescue that received AN and SLE from 1999 – 2001 at rates equivalent to 0, 200, 400, and 600 kg available N ha-1 yr-1, respectively. Fertilization significantly (P < 0.05) increased total soil N, amino sugar N (ASN), microbial biomass N (MBN), potential N mineralization and nitrification, indicating that fertilization improved soil N supplying capacity. However, soil microbial biomass C (MBC) was greatest at the lower fertilization rate, i.e. 200 kg N ha-1 yr-1. Microbial biomass C:N ratios also decreased significantly with fertilization rates (P < 0.05), suggesting that fungal biomass declined with increased N fertilization. In comparison with AN, soils receiving SLE had lower total soil N, ASN, MBC, microbial biomass C:N ratios and potential nitrification rates. The different effects between SLE and AN, especially at higher N fertilization rates, on soil and microbial properties are likely due to heavy metal stress associated with SLE application.