Soil fauna play an important role in litter decomposition and affect the “home-field advantage” (HFA) of litter decomposition. However, how this effect is modulated by the microenvironment needs further investigation. We conducted a reciprocal transplant experiment of litter decomposition using different mesh-size litterbags across litter and soil layers in subtropical coniferous (Pinus massoniana) and broad-leaved (Quercus variabilis) forests. Our results revealed a pronounced HFA in P. massoniana. P. massoniana litter decomposed faster in its home habitat by 40.6% in the litter layer and 10.2% in the soil layer in coarse mesh bags and by 21.8% in the litter layer and 21.4% in the soil layer in fine mesh bags. However, Q. variabilis litter showed faster decomposition in its home soil layer by 10.8% and 4.3% for coarse and fine mesh bags, whereas in the litter layer it decomposed faster in the away habitat by 16.7% and 20.6% for coarse and fine mesh bags, respectively. Higher soil mesofauna abundance and microbial activities in the coniferous forest compared to the broad-leaved forest drive the observed HFA of litter decomposition. Especially in the litter layer, the abundance of mesofauna was 89.8% higher in the coniferous forest. Coarse mesh bags generally facilitated a higher decomposition rate across litter and soil layers, likely due to a better interaction between soil mesofauna and extracellular enzyme activity. The HFA index exhibited distinct seasonal fluctuations, peaking in October for coarse mesh bags and in April for fine mesh bags within the litter layer, while soil layer peaks occurred in August and April. Notably, an increase in Acarina abundance strongly correlated with enhanced decomposition and HFA effects in the litter layer during October. This study revealed the sensitivity of HFA to the soil layer and soil fauna and underscores the complex role of the microclimate in shaping interactions among soil microorganisms, litter quality, and mesofauna, thereby enriching our understanding of litter decomposition dynamics in forest ecosystems.