Soils harbour some of the most diverse microbiomes on Earth and are essential for both nutrient cycling and carbon storage. To understand soil functioning, it is necessary to model the global distribution patterns and functional gene repertoires of soil microorganisms, as well as the biotic and environmental associations between the diversity and structure of both bacterial and fungal soil communities. Here we show, by leveraging metagenomics and metabarcoding of global topsoil samples (189 sites, 7,560 subsamples), that bacterial, but not fungal, genetic diversity is highest in temperate habitats and that microbial gene composition varies more strongly with environmental variables than with geographic distance. We demonstrate that fungi and bacteria show global niche differentiation that is associated with contrasting diversity responses to precipitation and soil pH. Furthermore, we provide evidence for strong bacterial-fungal antagonism, inferred from antibiotic-resistance genes, in topsoil and ocean habitats, indicating the substantial role of biotic interactions in shaping microbial communities. Our results suggest that both competition and environmental filtering affect the abundance, composition and encoded gene functions of bacterial and fungal communities, indicating that the relative contributions of these microorganisms to global nutrient cycling varies spatially.