Effects of cadmium (Cd) on microbial biomass, activity and community diversity were assessed in a representative variable charge soil (Typic Aquult) using an incubation study. Cadmium was added as Cd(NO3)(2) to reach a concentration range of 0-16 mg Cd/kg soil. Soil extractable Cd generally increased with Cd loading rate, but decreased with incubation time. Soil microbial biomass was enhanced at low Cd levels (0.5-1 mg/kg), but was inhibited consistently with increasing Cd rate. The ratio of microbial biomass C/N varied with Cd treatment levels, decreasing at low Cd rate (<0.7 mg/kg available Cd), but increasing progressively with Cd loading. Soil respiration was restrained at low Cd loading (<1 mg/kg), and enhanced at higher Cd levels. Soil microbial metabolic quotient (MMQ) was generally greater at high Cd loading (1-16 mg/kg). However, the MMQ is also affected by other factors. Cd contamination reduces species diversity of soil microbial communities and their ability to metabolize different C substrates. Soils with higher levels of Cd contamination showed decreases in indicator phospholipids fatty acids (PLFAs) for Gram-negative bacteria and actinomycetes, while the indicator PLFAs for Gram-positive bacteria and fungi increased with increasing levels of Cd contamination.