Over 35 years ago, it was hypothesized that mutualistic symbiotic soil fungi assisted land plants in their initial colonization of terrestrial environments. This important idea has become increasingly established with palaeobotanical and molecular investigations dating the interactions between arbuscular mycorrhizal fungi (AMF) and land plants to at least 400 Ma, but the functioning of analogous partnerships in 'lower' land plants remains unknown. In this study, we show with multifactorial experiments that colonization of a complex thalloid liverwort, a member of the most ancient extant clade of land plants, with AMF significantly promotes photosynthetic carbon uptake, growth and asexual reproduction. Plant fitness increased through fungal-enhanced acquisition of phosphorus and nitrogen from soil, with each plant supporting 100-400 m of AMF mycelia. A simulated CO(2)-rich atmosphere, similar to that of the Palaeozoic when land plants originated, significantly amplified the net benefits of AMF and likely selection pressures for establishment of the symbiosis. Our analyses provide essential missing functional evidence supporting AMF symbionts as drivers of plant terrestrialization in early Palaeozoic land ecosystems.