Soil microbes drive decomposition of soil organic matter (SOM) and regulate soil carbon (C) dynamics. Process‐based models have been developed to quantify changes in soil organic carbon (SOC) and carbon dioxide (CO
2
) fluxes in agricultural ecosystems. However, microbial processes related to SOM decomposition have not been, or are inadequately, represented in these models, limiting predictions of SOC responses to changes in microbial activities. In this study, we developed a microbial‐mediated decomposition model based on a widely used biogeochemical model, DeNitrification‐DeComposition (DNDC), to simulate C dynamics in agricultural ecosystems. The model simulates organic matter decomposition, soil respiration, and SOC formation by simulating microbial and enzyme dynamics and their controls on decomposition, and considering impacts of climate, soil, crop, and farming management practices (FMPs) on C dynamics. When evaluated against field observations of net ecosystem CO
2
exchange (NEE) and SOC change in two winter wheat systems, the model successfully captured both NEE and SOC changes under different FMPs. Inclusion of microbial processes improved the model's performance in simulating peak CO
2
fluxes induced by residue return, primarily by capturing priming effects of residue inputs. We also investigated impacts of microbial physiology, SOM, and FMPs on soil C dynamics. Our results demonstrated that residue or manure input drove microbial activity and predominantly regulated the CO
2
fluxes, and manure amendment largely regulated long‐term SOC change. The microbial physiology had considerable impacts on the microbial activities and soil C dynamics, emphasizing the necessity of considering microbial physiology and activities when assessing soil C dynamics in agricultural ecosystems.