Moso bamboo (Phyllostachys edulis (Carrière) J.Houz.) is famous for its fast growth and biomass accumulation, as well as high annual output for timber and bamboo shoots. Organic mulches are widely used to improve shoots’ production in moso bamboo forests. However, continuous mulching management may cause bamboo forest degradation and affect sustainable development. The objective of this study was to identify the degradation mechanism and to provide a theoretical basis for recovery. A complete randomized block design with four treatments was conducted, including mulching for one year (M1), two years (M2), three years (M3) and no-mulching management (NM). Soil nutrient contents, enzyme activities and microbial biomass were determined. With the increase of mulching years, the soil pH value gradually reduced, causing soil acidification, but the content of soil organic matter was inclined to ascend. Soil total nitrogen (TN), total phosphorus (TP) and total potassium (TK) contents showed an increasing trend, and they were significantly higher in mulching stands than those in NM (p < 0.05). Contents of soil available nutrients (AN, AP and AK) increased, then decreased with the increase of mulching years and peaked in M1. With the increase of mulching years, the soil stoichiometry ratio (C/N, C/P and N/P) gradually increased. Soil invertase, urease and acid phosphatase activities presented a single-peak curve and reached the maximum within one year after mulching. Total microbial biomass and that of individual groups changed greatly after mulching. Soil microbial biomass increased first and then decreased, and it was the largest in M1. The fungi:bacteria ratio decreased in the first year and then began to rise, while the aerobic:anaerobic ratio showed the opposite trend. According to the overall results, M3 leads to soil acidification, imbalance of the nutrients’ proportion, abnormal enzyme activity and change of soil microbial flora, and rotated mulching management (mulching one year and then recuperating one year) should be recommended in practice.