Pesticides are key stressors of soil microorganisms with reciprocal effects on ecosystem functioning. These effects have been systematically attributed to the parent compounds, while the impact of their transformation products (TPs) has been overlooked. We assessed, in a meadow soil (A), the transformation of iprodione and its toxicity on the (i) abundance of functional microbial groups (ii) activity of key microbial enzymes and (iii) diversity of bacteria, fungi and ammonia-oxidizing microorganisms (AOM) using amplicon sequencing. 3,5-DCA, the main TP of iprodione, was identified as the key explanatory factor for the persistent reduction in enzymatic activities, potential nitrification (PN) and for the structural changes observed in the bacterial and fungal community. A subsequent study in a fallow agricultural soil (B) failed to replicate these effects, in line with the limited formation of 3,5-DCA. Direct application of 3,5-DCA in soil B induced a dose-dependent reduction of PN and NO3--N, which recovered with time. In vitro assays with terrestrial AOM verified the superior toxicity of 3,5-DCA. Our findings pave the way for the utilization of AOM as pesticide toxicity biomarkers for soil in environmental risk assessment and stress the need to consider the contribution of TPs in pesticide toxicity assays.