The intricate mechanisms controlling plant diversity and community composition are cornerstone of ecological understanding. Yet, the role of mycorrhizal symbiosis in influencing community composition has often been underestimated. Here, we use extensive species survey data from 1315 grassland sites in China to elucidate the influence of mycorrhizal symbiosis on plant phylogenetic diversity and community assembly. We show that increasing mycorrhizal symbiotic potential leads to greater phylogenetic dispersion within plant communities. Mycorrhizal species predominantly influence deterministic processes, suggesting a role in niche‐based community assembly. Conversely, non‐mycorrhizal species exert a stronger influence on stochastic processes, highlighting the importance of random events in shaping community structure. These results underscore the crucial but often hidden role of mycorrhizal symbiosis in driving plant community diversity and assembly. This study provides valuable insights into the mechanisms shaping ecological communities and the way for more informed conservation that acknowledges the complex interplay between symbiosis and community dynamics.