More intensive removal of woody biomass for the bio-economy will disrupt litter and succession cycles. Especially at risk is the retention of fine and coarse woody debris (FWD and CWD), crucial factors in forest biodiversity and nutrient cycling. However, to what extent CWD affects soil functioning remains unknown, and is seldom considered. From 32 paired test–reference points in eight Fagus sylvatica (L.) stands throughout Southwest Germany, CWD significantly increased soil C/N ratios, base saturation, and possibly pH. CWD-induced changes in soil porosity, available water capacity, and total organic carbon depended on site and CWD characteristics. As such, CWD can be viewed as a “pedogenic hot-spot” of concentrated biogeochemical and -physical processes with outsized effects on soil functioning and development. CWD management for soil functioning should consider site and tree species specific volume thresholds, timed rotations, and spatial densities, but appropriate implementation requires further research to define best management practices. If successful, overall forest resilience as well as soil functioning and productivity can be improved.