Nitrous oxide (N2O) emissions from arable soils are predominantly caused by denitrifying microbes, of which fungal denitrifiers are of particular interest, as fungi, in contrast to bacteria, terminate denitrification with N2O. Reduced tillage has been shown to increase gaseous nitrogen losses from soil, but knowledge of how varying tillage regimes and associated soil physical and chemical alterations affect fungal denitrifiers is limited. Based on results from a long-term (>40 years) tillage experiment, we show that non-inversion tillage resulted in increased potential denitrification activity in the upper soil layers, compared to annual or occasional (every 4–5 years) conventional inversion tillage. Using sequence-corrected abundance of the fungal nirK gene, we further identified an increased genetic potential for fungal denitrification, compared to that caused by bacteria, with decreasing tillage intensity. Differences in the composition and diversity of the fungal nirK community imply that different tillage regimes select for distinct fungal denitrifiers with differing functional capabilities and lifestyles, predominantly by altering carbon and nitrogen related niches. Our findings suggest that the creation of organic hotspots through stratification by non-inversion tillage increases the diversity and abundance of fungal denitrifier communities and modifies their composition, and thus their overall relevance for N2O production by denitrification, in arable soils.