The microbiome of grassland soils provides ecosystem services essential to plant health and productivity, including nutrient cycling and suppression of soil-borne diseases. Understanding how soil management practices affect soil microbial communities will provide opportunities by which indigenous soil microbes and their functions can be managed to sustain or promote plant growth and enhance disease suppressiveness. Here, we investigated the impact of 20 years of plant residue management in a long-term grassland field trial on soil chemical and (micro)biological properties, in particular the suppression of damping-off disease of kale caused by the fungal root pathogen Rhizoctonia solani AG 2–1. Plant residue management led to significant variation in the community structure of the bacterial genus Pseudomonas between treatments. Soil organic matter quality (inferred carbon recalcitrance) was responsible for 80% of the observed variation in Pseudomonas community structure. Furthermore, increased Pseudomonas species diversity (Shannon's index), microbial activity, soil organic matter content, and carbon availability distinguished suppressive (low disease) soils from conducive (high disease) soils. More specifically, Pseudomonas species diversity and richness (Margalef's) were identified as the primary parameters explaining the greatest proportion (>30%) of variation in the disease suppressive capacity of soils across treatments. Collectively, our results suggest that management-induced shifts in Pseudomonas community composition, notably species diversity and richness, provide a better indicator of disease conduciveness for a broad-host range fungal pathogen than soil chemical parameters. In conclusion, our study indicates that frequent addition of organic residues to agricultural grassland soils enhances the diversity and activity of plant-beneficial bacterial taxa.