Microbial carbon use efficiency (CUE) is a key microbial trait affecting soil organic carbon (SOC) dynamics. However, we lack a unified and predictive understanding of the mechanisms underpinning the temperature response of microbial CUE, and, thus, its impacts on SOC storage in a warming world. Here, we leverage three independent soil datasets (n = 618 for microbial CUE; n = 591 and 660 for heterotrophic respiration) at broad spatial scales to investigate the microbial thermal response and its implications for SOC responses to warming. We show a nonlinear increase and decrease of CUE and heterotrophic respiration, respectively, in response to mean annual temperature (MAT), with a thermal threshold at ≈15 °C. These nonlinear relationships are mainly associated with changes in the fungal-to-bacterial biomass ratio. Our microbial-explicit SOC model predicts significant SOC losses at MAT above ≈15 °C due to increased CUE, total microbial biomass, and heterotrophic respiration, implying a potential abrupt transition to more vulnerable SOC under climate warming.