Fire can impact terrestrial ecosystems by changing abiotic and biotic conditions. Short fire intervals maintain grasslands and communities adapted to frequent, low-severity fires. Shrub encroachment that follows longer fire intervals accumulates fuel and can increase fire severity. This patchily distributed biomass creates mosaics of burn severities in the landscape-pyrodiversity. Afforded by a scheduled burn of a watershed protected from fires for 27 years, we investigated effects of woody encroachment and burn severity on soil chemistry and soil-inhabiting bacteria and fungi. We compared soils before and after fire within the fire-protected, shrub-encroached watershed and soils in an adjacent, annually burned and non-encroached watershed. Organic matter and nutrients accumulated in the fire-protected watershed but responded less to woody encroachment within the encroached watershed. Bioavailable nitrogen and phosphorus and fungal and bacterial communities responded to high-severity burn regardless of encroachment. Low-severity fire effects on soil nutrients differed, increased bacterial but decreased fungal diversity and effects of woody encroachment within the encroached watershed were minimal. High-severity burns in the fire-protected watershed led to a novel soil system state distinct from non-encroached and encroached soil systems. We conclude that severe fires may open grassland restoration opportunities to manipulate soil chemistry and microbial communities in shrub-encroached habitats. Keywords: fire severity and history; woody encroachment; tallgrass prairie ecosystem; soil bacteria and fungi; soil chemistry; alternate ecosystem states