Understanding interspecific interactions is key to explaining and modelling community development and associated ecosystem function. Most interactions research has focused on pairwise combinations, overlooking the complexity of multispecies communities. This study investigated three-way interactions between saprotrophic fungi in wood and across soil, and indicated that pairwise combinations are often inaccurate predictors of the outcomes of multispecies competition in wood block interactions. This inconsistency was especially true of intransitive combinations, resulting in increased species coexistence within the resource. Furthermore, the addition of a third competitor frequently destabilised the otherwise consistent outcomes of pairwise combinations in wood blocks, which occasionally resulted in altered resource decomposition rates, depending on the relative decay abilities of the species involved. Conversely, interaction outcomes in soil microcosms were unaffected by the presence of a third combatant. Multispecies interactions promoted species diversity within natural resources, and made community dynamics less consistent than could be predicted from pairwise interaction studies.