Non‐native plant invasions can alter nutrient cycling processes and contribute to global climate change. In southern California, California sage scrub (hereafter sage scrub), a native shrub‐dominated habitat type in lowland areas, has decreased to <10% of its original distribution. Postdisturbance type‐conversion to non‐native annual grassland, and increasingly to mustard‐dominated invasive forbland, is a key contributor to sage scrub loss. To better understand how type‐conversion by common invasive annuals impacts carbon (C) and nitrogen (N) storage in surface soils, we examined how the identity of the invader (non‐native grasses,
Bromus
spp.; and non‐native forbs,
Brassica nigra
), microbial concentrations, and soil properties interact to influence soil nutrient storage in adjacent native and invasive habitat types at nine sites along a coast to inland gradient. We found that the impact of type‐conversion on nutrient storage was contingent upon the invasive plant type. Sage scrub soils stored more C and N than non‐native grasslands, whereas non‐native forblands had nutrient storage similar to or higher than sage scrub. We calculate that >940 t C km
−2
and >60 t N km
−2
are lost when sage scrub converts to grass‐dominated habitat, demonstrating that grass invasions are significant regional contributors to greenhouse gas emissions. We found that sites with greater total C and N storage were associated with high cation exchange capacities and bacterial concentrations. Non‐native grassland habitat type was a predictor of lower total C, and soil pH, which was greatest in invasive habitats, was a predictor of lower total N. We demonstrate that modeling regional nutrient storage requires accurate classification of habitat type and fine‐scale quantification of cation exchange capacity, pH, and bacterial abundance. Our results provide evidence that efforts to restore and conserve sage scrub enhance nutrient storage, a key ecosystem service reducing atmospheric CO
2
concentrations.