Stimulation of plant productivity caused by Agaricus fairy rings has been reported, but little is known about the effects of these fungi on soil aggregation and the microbial community structure, particularly the communities that can bind soil particles. We studied three concentric zones of Agaricus lilaceps fairy rings in Eastern Montana that stimulate western wheatgrass (Pascopyrum smithii): outside the ring (OUT), inside the ring (IN), and stimulated zone adjacent to the fungal fruiting bodies (SZ) to determine (1) soil aggregate proportion and stability, (2) the microbial community composition and the N-acetyl-β-d-glucosaminidase activity associated with bulk soil at 0–15 cm depth, (3) the predominant culturable bacterial communities that can bind to soil adhering to wheatgrass roots, and (4) the stimulation of wheatgrass production. In bulk soil, macroaggregates (4.75–2.00 and 2.00–0.25 mm) and aggregate stability increased in SZ compared to IN and OUT. The high ratio of fungal to bacteria (fatty acid methyl ester) and N-acetyl-β-d-glucosaminidase activity in SZ compared to IN and OUT suggest high fungal biomass. A soil sedimentation assay performed on the predominant isolates from root-adhering soil indicated more soil-binding bacteria in SZ than IN and OUT; Pseudomonas fluorescens and Stenotrophomonas maltophilia isolates predominated in SZ, whereas Bacillus spp. isolates predominated in IN and OUT. This study suggests that growth stimulation of wheatgrass in A. lilaceps fairy rings may be attributed to the activity of the fungus by enhancing soil aggregation of bulk soil at 0–15 cm depth and influencing the amount and functionality of specific predominant microbial communities in the wheatgrass root-adhering soil.