Soil microbial growth and activity are generally assumed to recover rapidly after dissipation of organic toxicants. We studied the effects of four readily degradable isothiazolinone biocides (benzisothiazolinone, BIT; methylisothiazolinone, MIT; octylisothiazolinone, OIT; 4,5-dichloro-2-octyl-isothiazolinone, DCOIT) on bacterial growth, fungal growth, basal respiration, and substrate-induced respiration in controlled soil microcosm experiments. Bacterial growth followed by fungal growth were the two most sensitive endpoints during the first two days. Significant dissipation of biocides occurred within just 8 h and 94–100% had dissipated after 40 days except for DCOIT tested at a high concentration (50 mg kg⁻¹, 54% remaining after 40 d). Despite biocide dissipation, all isothiazolinones inhibited bacterial growth for >7 days, whereas fungal growth and substrate-induced respiration were inhibited for up to 40 days. Bacterial growth recovery after 40 days was linked to development of bacterial community tolerance for DCOIT, but not for the other less persistent isothiazolinones. Our study is the first to report on toxic effects of isothiazolinones on soil microbial growth and demonstrates that inhibitory effects of isothiazolinones on soil microbial growth and activity (especially fungal growth and substrate-induced respiration) persisted even long after biocide dissipation, indicating “legacy effects” and retarded recovery of soil microbial functions. We propose that retarded recovery of fungal, relative to bacterial, growth may be a general phenomenon during the dissipation of toxicants in contaminated soils and that it may be explained by intrinsic differences between bacterial and fungal biology in soil and by competitive interactions between these two dominant groups of soil microbial decomposers.