Background and aims Arbuscular mycorrhizal (AM) fungi play indispensable roles in enhancing plant growth and maintaining multifunctionality. Nevertheless, the response mechanisms of the AM fungal community, diversity, and multifunctionality to different nitrogen (N) and phosphorus (P) inputs remain poorly understood in dryland areas, particularly on China's Loess Plateau. Methods We collected wheat rhizosphere soils under four fertilization treatments (P input alone (Pc); N input alone (Nc); optimized N and P inputs (MNP, recommended input rates for local farmers); and excessive N and P inputs (HNP, overuse for wheat)) across four sites to explore the impacts of N and P fertilizer inputs on soil AM fungal diversity, assembly processes, crop traits, and multifunctionality. Results The Pc treatment significantly decreased AM fungal diversity, whereas the MNP treatment increased it. Compared with the HNP treatment, the MNP treatment also resulted in the highest soil AM fungal network complexity without significantly reducing wheat grain yield. Furthermore, both multifunctionality and wheat grain yield were strongly associated with the biodiversity of the dominant AM fungal ecological cluster (Module #0). Conclusions Our results emphasize the importance of AM fungal community structure and diversity in maintaining wheat grain yield and multifunctionality under the recommended N and P fertilizer inputs.