The dynamics of fungal and bacterial potential physiological activities during leaf, branch, and bark litter decomposition along a gap size gradient in a subtropical forest was determined using substrate-induced respiration (SIR) with antibiotics selective for fungi and bacteria, respectively. A gap size gradient (1) was under closed canopy; (2) had small gaps with a diameter (≤5m); (3) had small to intermediate gaps (5-15 m diameter); (4) had intermediate to large gaps (15-30 m diameter); and (5) had large gaps (≤30 m diameter). Litter decomposition was studied using a litter bag technique. Fungi had higher SIR than bacteria for each type of litter in any size class of gaps. Gaps 1, 2, and 3 had higher fungal and bacterial SIRs than gaps 4 and 5. Moreover, decomposing leaf litter exhibited higher fungal and bacterial SIRs than branch, and branch higher than bark. Simple correlation analysis indicated that fungal SIR was a reliable index of decomposition rates. Fungal SIR was significantly and positively correlated with soil moisture, whereas bacterial SIR was not significantly correlated with soil moisture. The relationships among microclimatic factors, fungal and bacterial physiological activities, and rates of plant litter decomposition suggest that, in subtropical ecosystems, fungal community activities were strongly and directly regulated by the environmental heterogeneity within gaps, and an important regulator of rates of plant litter decomposition rates.