The health of Eucalyptus gomphocephala is declining within its natural range in south-western Australia. In a pilot study to assess whether changes in mycorrhizal fungi and soil chemistry might be associated with E. gomphocephala decline, we set up a containerized bioassay experiment with E. gomphocephala as the trap plant using intact soil cores collected from 12 sites with E. gomphocephala canopy condition ranging from healthy to declining. Adjacent soil samples were collected for chemical analysis. The type of mycorrhiza (arbuscular or ectomycorrhizal) formed in containerized seedlings predicted the canopy condition of E. gomphocephala at the sites where the cores were taken. Ectomycorrhizal fungi colonization was higher in seedling roots in soil taken from sites with healthy canopies, whereas colonization by arbuscular mycorrhizal fungi dominated in roots in soil taken from sites with declining canopies. Furthermore, several soil chemical properties predicted canopy condition and the type of mycorrhizal fungi colonizing roots. These preliminary findings suggest that large-scale studies should be undertaken in the field to quantify those ectomycorrhiza (ECM) fungi sensitive to E. gomphocephala canopy decline and whether particular ECM fungi are bioindicators of ecosystem health.