Plant litter often decomposes faster in the habitat from which it was derived (i.e. home) than when placed in foreign habitats (i.e. away), which has been called the home-field advantage (HFA) of litter decomposition. We tested whether the HFA of litter decomposition is driven by decomposer communities being specialized at decomposing litter in their home habitat, by reciprocally transplanting litter from grassland to early-successional forest. Unexpectedly, we found an overall disadvantage for at-home decomposition despite large differences in litter quality (lignin:N) between the two habitats. We found more evidence for habitat specialization among secondary decomposers (mites) than the primary decomposers (bacteria and fungi), suggesting that soil animals may be important in driving HFA patterns where they do exist. Grass litter decomposition in forest slowed down and became more fungal-based, while tree litter decomposition in grassland increased yet showed no shift to being bacterially-based, relative to 'at home' decomposition. This suggests a biological explanation for why a positive HFA was not observed. Our results highlight that both environmental context and soil biology can play an important and sometimes counter-intuitive role in modifying decomposition. A better understanding of the interaction between all three primary drivers of decomposition (the environment, litter quality and soil organisms) is necessary for reliable prediction of decomposition at global scale