We understand little about the factors that determine and maintain local species diversity of arbuscular mycorrhizal fungi (AMF), the reasons why a single plant has multiple AMF partners, and how that diversity influences host plant performance. The extent to which co-occurring AMF species occupy different niche space, based on their ability to tolerate different soil conditions or differentially promote host plant growth in those differing conditions, offers possible explanations for the maintenance of diversity. AMF community composition was examined in relation to soil variability in a naturally metalliferous serpentine grassland and along a Cu, Cd, Pb, and Zn soil contamination gradient. Both field surveys demonstrated that AMF community composition is strongly influenced by soil factors and provide evidence that local diversity of AMF communities is at least partially maintained by environmental niche partitioning among fungal species. Because there is some evidence that AMF species can be non-additive in their effects on plant growth, the appropriate measure of AMF function may be how much plant growth is affected when that particular AMF species is deleted from the community. Greenhouse experiments using this deletion approach, and the traditional approach of evaluating host plant growth with a single AMF species, were performed. The experiments involved two grass species: Andropogon gerardii and Sorhastrum nutans and a subset of their natural AMF community grown in soils differing in nitrogen, phosphorus, and nickel, which is naturally high in the plants' native serpentine soils. This deletion method revealed that functional redundancy, with regards to host plant growth promotion, was the most common consequence of multiple species infecting one root. Functional complementarity and functional synergy, which may help explain why plants support multiple partners, were also demonstrated. Each of these interactions was found to be soil context dependent for most fungal species. These results demonstrate that the composition of the AMF community colonizing a host plant is important for plant performance and the consequences of colonization change with soil condition. They also suggest an explanation for why any one plant species supports several species of these fungi.