Land application of farmyard manure (FYM) is a widespread agronomic practice used to enhance soil fertility, but its long-term effects on soil microbial carbon (C) and nitrogen (N) cycling have not been investigated in detail. Topsoils (0–23 cm) and subsoils (23–38 cm) were collected from a field trial on a sandy-textured soil where FYM had been applied at high (50–25 t ha−1 yr−1, 28 yr) and low rates (10 t ha−1 yr−1, 16 yr), and compared to soil treated only with synthetic NPK fertilisers. The turnover rate of key components of soil organic matter (SOM; proteins, peptides, amino acids, cellulose, and glucose) were evaluated by 14C labelling and measuring cellobiohydrolase, β-glucosidase, β-1,4-N-acetylglucosaminidase, L-leucine aminopeptidase, protease, and deaminase activities, whereas gross NH4+ and NO3− production and consumption were determined by 15N-isotope pool dilution. Microbial communities were determined using phospholipid fatty acid (PLFA) profiling. Our results indicate that long-term FYM addition significantly enhanced the accumulation of soil C and N, soil organic N (SON) turnover, exoenzyme activity, and gross NO3− production and assimilation. Rates of protein, peptide, and amino acid processing rate were 169–248, 87–147, and 85–305 mg N kgDWsoil−1 d−1, respectively, gross NH4+ and NO3− production and consumption were 1.8–5.8 mg N kgDWsoil−1 d−1, and the highest rates were shown under the high FYM treatment in topsoil and subsoil. The half-life of cellulose and glucose decomposition under the high FYM treatment were 16.4% and 31.0% lower than them in the synthetic NPK fertiliser treatment, respectively, indicating higher rates of C cycling under high manure application as also evidenced by the higher rate of CO2 production. This was ascribed to an increase in microbial biomass rather than a change in microbial community structure. Based on the high pool sizes and high turnover rate, this suggests that peptides may represent one of the dominant forms of N taken up by soil microorganisms. We conclude that long-term FYM application builds SOM reserves and induces faster rates of nutrient cycling by boosting microbial biomass rather than by changing its community composition.