Fungal endophytes have been extensively found in most terrestrial plants. This type of plant–microorganism symbiosis generates many benefits for plant growth by promoting nutrient availability, uptake, and resistance to environmental disease or stress. Recent studies have reported that fungal endophytes have a potential impact on plant litter decomposition, but the mechanisms behind its effect are not well understood. We proposed a hypothesis that the impacts of fungal endophytes on litter decomposition are not only due to a shift in the symbiont-induced litter quality but a shift in soil microenvironment. To test this hypothesis, we set-up a field trial by planting three locally dominant grass species (wild barley, drunken horse grass, and perennial ryegrass) with Epichloë endophyte-infected (E+) and -free (E-) status, respectively. The aboveground litter and bulk soil from each plant species were collected. The litter quality and the soil biotic and abiotic parameters were analyzed to identify their changes across E+ and E- status and plant species. While Epichloë endophyte status mainly caused a significant shift in soil microenvironment, plant species had a dominant effect on litter quality. Available nitrogen (N) and phosphorus (P) as well as soil organic carbon and microbial biomass in most soils with planting E+ plants increased by 17.19%, 14.28%, 23.82%, and 11.54%, respectively, in comparison to soils with planting E- plants. Our results confirm that fungal endophytes have more of an influence on the soil microenvironment than the aboveground litter quality, providing a partial explanation of the home-field advantage of litter decomposition.