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Climate models predict an overall reduction in rainfall in mid-latitudes and sub-tropical dry regions. In southeast Australian grasslands, changes in rainfall may affect plant productivity and diversity because both are highly responsive to rainfall regimes. Associated soil microorganisms may help plants cope with these changes but also may respond themselves to altered rainfall patterns, directly or indirectly via responses of plants. Arbuscular mycorrhizal (AM) fungi are an important component of the soil microbial community in grasslands. They form symbiotic associations with the majority of plant species and are dependent on the carbon provided by their host. In return, they contribute to plant nutrition and tolerance of environmental stress, including drought. The overarching goal of this work was to study the response of AM fungal communities to altered rainfall regimes. In particular, I evaluated AM fungal responses to changes in rainfall in association with changes in root traits (chapter 2) and in the composition and richness of the plant community (chapter 4), using DNA sequencing techniques. I also used a trait-based approach to understand how precipitation regimes affect the AM fungal community (chapter 3). AM fungal communities may respond to altered rainfall regimes either directly or indirectly via changes in host traits. I studied the response of AM fungal communities associated with roots of four common plant species to experimentally altered rainfall patterns in replicated field plots established within an Australian mesic grassland. I found that altered rainfall affected the composition, but not the richness, of the AM fungal community. Specific root length was observed to correlate with AM fungal richness, while concentrations of phosphorus and calcium in root tissue and the proportion of root length allocated to fine roots were correlated with AM fungal community composition. However, I found no evidence that AM fungal response to rainfall resulted via changes in the host because none of the studied traits were affected by rainfall manipulations. However, the effect of altered rainfall patterns via root traits may occur in more responsive plant species or more water limited environments. In addition, I observed that variability among AM fungal communities was high even in communities from the same treatments, and a large proportion of the variation remained unexplained. The high variability observed in molecular community data may be masking the effects of changes in the environment on AM fungal community assembly, which makes predicting AM fungal responses to climate change difficult. I used a trait-based approach to improve our understanding of AM fungal community assembly because we expect that taxa are filtered into local communities according, in part, to their traits and the roles that these traits play in adaptation to environmental conditions. Spores represent a key life history stage for colonisation and survival within stressful environments, therefore I studied spore traits hypothesized to enhance AM fungal fitness in arid environments. I used microscopy, image analysis and a colorimetric assay to measure spore traits at the community level in samples collected in six sites along gradients of aridity in New South Wales and Queensland, Australia, and in communities exposed to two years of experimentally reduced rainfall in replicated field plots in Richmond, NSW. Overall, I found melanin content were higher in more arid environments. I observed a large range of spore colours at all sites but greater range, with a higher proportion of both dark and light spores, in more arid sites. Average spore density differed depending on arid site but I found no evidence that density varied in relation to the aridity gradient. Average spore size increased in the summer rainfall-exclusion treatment after approximately two years, but was not observed to vary along the aridity gradient. Community responses to climate change can take time to manifest and vary over time, making temporal dynamics important to consider. I therefore studied the response of the AM fungal communities in soil to altered rainfall regimes every six months over a period of almost four years and evaluated whether changes in AM fungal communities were associated with plant community richness and composition. I observed that altered rainfall regimes resulted in distinct AM fungal communities differing in richness and composition three years after rainfall manipulations began. I found that plant and AM fungal communities co-varied but found more support for the hypothesis that fungal community composition influence plant community composition than vice versa. However, I found no evidence that altered rainfall regimes were leading to distinct co-associations between plants and AM fungi, suggesting that plant-fungal co-associations and responses to rainfall are decoupled in this system. Overall, my results provide some evidence that grassland plant community at the studied site may not be responding to altered rainfall regimes via changes in the AM fungal communities. Based on my work in eastern Australia, I demonstrated that changes in rainfall regimes influence AM fungal community richness and composition. Shifts in the AM fungal communities may not be immediate, and the direction in which these communities are expected to respond to altered rainfall regimes will depend on the specifics of future climatic conditions. Although I did find associations between AM fungal communities and the identity of host plants and the composition of plant communities, I did not find evidence supporting my predictions that effects of altered rainfall regimes would occur via changes in the host root traits or via changes in the plant community composition. I identified traits potentially associated with rainfall regimes and results suggest that AM fungal communities found in drier environments may have smaller spores with a higher melanin content, and were characterised by a high frequency of both light and dark spores and a lower frequency of intermediate types. Further research is needed to predict how AM fungal communities will respond to climate change, as well as to study how these changes will influence the structure and functioning of grassland ecosystems (approaches for such studies are detailed in chapter 5).