Biochar has important biogeochemical functions in soil—first as a means to sequester carbon, and second as a soil conditioner to potentially enhance soil quality and fertility. Volatile matter (VM) content is a property of biochar that describes its degree of thermal alteration, which can have a direct influence on carbon and nitrogen dynamics in soil. In this study, we characterized the VM in biochars derived from two locally sourced feedstocks (corncob and kiawe wood) and evaluated the relationship of VM content to nitrogen transformations and culturable fungal biomass. Using 13C nuclear magnetic resonance (NMR) spectroscopy, we found that the VM content of biochar primarily consisted of alkyl (5.1–10.1%), oxygen-substituted alkyl (2.2–6.7%), and phenolic carbon (9.4–11.6%). In a series of laboratory incubations, we demonstrated that corncob biochars with high VM (23%) content provide a source of bioavailable carbon that appeared to support enhanced viable, culturable fungi (up to 8 fold increase) and cause nitrogen immobilization in the short-term. Corncob biochar with bioavailable VM was nitrogen-limited, and the addition of nitrogen fertilizer resulted in a four-fold increase in total hydrolytic enzyme activity and the abundance of culturable fungal colonies. In contrast, kiawe biochar with an equivalent VM content differed substantially in its composition and effect on these same biological parameters. Therefore, the rapid measurement of VM content is too coarse to differentiate chemical composition and to predict the behavior of biochars across feedstocks and production methods.