The Paleocene-Eocene thermal maximum was a period of abrupt, transient global warming, fueled by a large release of 13C-depleted carbon and marked globally by a negative carbon isotope excursion. While the carbon isotope excursion is often identified in the carbon isotope ratios of bulk soil organic matter (δ13Corg), these records can be biased by factors associated with production, degradation, and sources of sedimentary carbon input. To better understand these factors, we compared δ13Corg values from Paleocene-Eocene thermal maximum rocks in the southeastern Bighorn Basin, Wyoming, with those derived from leaf wax n-alkanes (δ13Cn-alk). While both δ13Cn-alk and δ13Corg records indicate an abrupt, negative shift in δ13C values, the carbon isotope excursions observed in bulk organic matter are smaller in magnitude and shorter in duration than those in n-alkanes. To explore these discrepancies, we modeled predicted total plant tissue carbon isotope (δ13CTT) curves from the δ13Cn-alk record using enrichment factors determined in modern C3 plants. Measured δ13Corg values are enriched in 13C relative to predicted δ13CTT, with greater enrichment during the Paleocene-Eocene thermal maximum than before or after. The greater 13C enrichment could reflect increased degradation of autochthonous organic matter, increased input of allochthonous fossil carbon enriched in 13C, or both. By comparing samples from organic-rich and organic-poor depositional environments, we infer that microbial degradation rates doubled during the Paleocene-Eocene thermal maximum, and we calculate that fossil carbon input increased ∼28%–63%. This approach to untangling the controls on the isotopic composition of bulk soil carbon is an important development that will inform not only future studies of global carbon cycle dynamics during the Paleocene-Eocene thermal maximum hyperthermal event, but also any study that seeks to correlate or estimate duration and magnitude of past events using soil organic carbon.