In order to investigate whether the extreme environmental factors could be important factors in determining the composition of soil fungal communities by interfering with vegetation, we studied the soil fungal communities along the vegetation gradient in Hot-dry Valley of Yuanjiang, Yunnan Province. PCR-DGGE (denaturing gradient gel electrophoresis) and clone library technology were performed in the study. The soil fungal communities showed a very small change from shrub to grass in spite of a significant vegetation gradient existed. Ascomycota was found as the dominant species in the soil fungal communities, accounting for 70% of all clones. There were relatively significant differences in the fungal communities between different soil layers, for example, Ascomycota mainly distributed in the surface humus soil, while Basidiomycota mainly in the mineral soil. Our results demonstrated the soil fungal communities were interfered by the extreme hot and dry environment, showed a quite different community from other general findings, which declared vegetation change decided the soil microorganism.