The effects of mammalian ecosystem engineers on soil microbial communities and ecosystem functions in terrestrial ecosystems are poorly known. Disturbance from livestock has been widely reported to reduce soil function, but disturbance by animals that forage in the soil may partially offset these negative effects of livestock, directly and/or indirectly by shifting the composition and diversity of soil microbial communities. Understanding the role of disturbance from livestock and ecosystem engineers in driving soil microbes and functions is essential for formulating sustainable ecosystem management and conservation policies. We compared soil bacterial community composition and enzyme concentrations within four microsites: foraging pits of two vertebrates, the indigenous short-beaked echidna (Tachyglossus aculeatus) and the exotic European rabbit (Oryctolagus cuniculus), and surface and subsurface soils along a gradient in grazing-induced disturbance in an arid woodland. Microbial community composition varied little across the disturbance gradient, but there were substantial differences among the four microsites. Echidna pits supported a lower relative abundance of Acidobacteria and Cyanobacteria, but a higher relative abundance of Proteobacteria than rabbit pits and surface microsites. Moreover, these microsite differences varied with disturbance. Rabbit pits had a similar profile to the subsoil or the surface soils under moderate and high, but not low disturbance. Overall, echidna foraging pits had the greatest positive effect on function, assessed as mean enzyme concentrations, but rabbits had the least. The positive effects of echidna foraging on function were indirectly driven via microbial community composition. In particular, increasing activity was positively associated with increasing relative abundance of Proteobacteria, but decreasing Acidobacteria. Our study suggests that soil disturbance by animals may offset, to some degree, the oft-reported negative effects of grazing-induced disturbance on soil function. Further, our results suggest that most of this effect will be derived from echidnas, with little positive effects due to rabbits. Activities that enhance the habitat for echidnas or reduce rabbit populations are likely to have a positive effect on soil function in these systems.