Research on ectomycorrhizal diversity has focused on conifer forests; we know less about more arid systems (eg. CA blue oak, Quercus douglasii) woodlands. Exotic annual grasses invaded oak woodlands within the last 100 years, replacing native perennial grasses. Oak regeneration has declined, perhaps related to increased annual grass competition. We are studying the role of mycorrhizal fungi in nutrient acquisition by CA oaks. Our research has altered our understanding of how these oak woodlands function. First, we originally thought that ectomycorrhizal (EM) diversity of fungal fruiting bodies in oak woodlands would be similar to that in conifer forests (both oaks and conifers form EM), but certain fungal groups are more diverse in oak woodlands (eg. more hypogeous fungi). Second, we expected common mycorrhizal networks (CMNs) to behave like “physical pipes”, moving nutrients and carbon exclusively between plants sharing a CMN. However, CMNs are not exclusive pathways; roots appear to be ‘leaky', particularly with respect to nitrogen (N). Furthermore, oak networks and arbuscular (AM) mycorrhizal networks of grasses and forbs interact, transferring N. Thirdly, we expected EM and AM plants to compete for nutrients. Surprisingly, sometimes they cooperate, enhancing N transfer to both EM and AM plants. Lastly, on oak root tips, N cycling processes were not dominated by the most abundant EM types. In a 15N enrichment study, some less abundant mycorrhizal types acquired more 15N and their 15N natural abundance values were higher than those of the more abundant types. We suggest that less abundant mycorrhizal morphotypes (fungal phylotypes) may be a keystone species, acting as important ‘sinks' for nitrogen in oak woodland soils.