Ectomycorrhizal (ECM) symbiosis has been proposed to link plant photosynthesis and soil organic matter (SOM) decomposition through the production of fungal enzymes which promote SOM degradation and nitrogen (N) uptake. However, laboratory and field evidence for the existence of these processes are rare. Piloderma sp., a common ECM genus in boreal forest soil, was chosen as model mycorrhiza for this study. The abundance of Piloderma sp. was studied in root tips and soil over one growing season and in winter. Protease production was measured from ectomycorrhiza and soil solution in the field and pure fungal cultures. We also tested the effect of Piloderma olivaceum on host plant organic N nutrition in the laboratory. The results showed that Piloderma sp. was highly abundant in the field and produced extracellular proteases, which correlated positively with the gross primary production, temperature and soil respiration. In the laboratory, Piloderma olivaceum could improve the ability of Pinus sylvestris L. to utilize N from extragenous proteins. We suggest that ECM fungi, although potentially retaining N in their hyphae, are important in forest C and N cycling due to their ability to access proteinaeous N. As Piloderma sp. abundance appeared to be seasonally highly variable, recycling of fungal-bound N after hyphal death may therefore be of primary importance for the N cycling in boreal ecosystems.