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In an increasingly flammable world, wildfire is altering the terrestrial carbon balance. However, the degree to which novel wildfire regimes disrupt biological function remains unclear. Here, we synthesize the current understanding of above- and belowground processes that govern carbon loss and recovery across diverse ecosystems. We find that intensifying wildfire regimes are increasingly exceeding biological thresholds of resilience, causing ecosystems to convert to a lower carbon-carrying capacity. Growing evidence suggests that plants compensate for fire damage by allocating carbon belowground to access nutrients released by fire, while wildfire selects for microbial communities with rapid growth rates and the ability to metabolize pyrolysed carbon. Determining controls on carbon dynamics following wildfire requires integration of experimental and modelling frameworks across scales and ecosystems.