Hydrocarbon contamination in soils may be toxic to plants and soil microorganisms and act as a source of groundwater contamination. The objective of this study was to evaluate the fate of diesel in soils with or without added nutrients. The soils examined either had or had not a previous history of hydrocarbon contamination. Particular aspects examined were soil respiration, changes in microbial population, breakdown of diesel hydrocarbons, and phytotoxicity to the germination of perennial ryegrass. Soil respiration was measured as evolved CO2. Bacterial population was determined as colony forming units in dilution plates and fungal activity was measured as hyphal length. The fate of individual hydrocarbons was determined by gas chromatography-mass spectrometry after extraction with dichloromethane. When diesel was added to soil with no previous history of hydrocarbon contamination at rates up to 50 mg/g, the respiration response showed a lag phase of 6 days and maximum respiration occurred at day 11. The lag phase was 2 days and maximum respiration occurred at day 3 in soil with a previous history of hydrocarbon contamination. After the peak, respiration decreased up to about 20 days in both soils. Thereafter, respiration become more or less constant but substantially greater than the control. N and P addition along with diesel did not reduce the lag phase but increased the respiration over the first 20 days of incubation. Diesel addition with or without N and P increased the bacterial population 10- to 100-fold but fungal hyphal length did not increase. Diesel addition at a rate of 136 mg/g did not increase the microbial population. Removal of inhibition to germination of perennial ryegrass was linked to the decomposition of nC10 and nC11 hydrocarbons and took from 11 to 30 days at diesel additions up to 50 mg/g depending on the soil. Inhibition to germination of perennial ryegrass persisted to more than 24 weeks at the 136 mg/g of diesel addition.