Negative interactions among plants have been explained by two main mechanisms, competition and allelopathy. Here, I focus on a third mechanism resulting from the interaction of the previous two, and based upon changes in nutrient availability caused by the release of phenolic compounds into the soil. Phenolic compounds globally decrease soil N availability by changing microbial activity. The relevance of these processes in natural conditions, and the consequences that changes in N availability might have on the distribution of plant species in the ecosystem, remains to be evaluated. Here I describe the specific mechanisms by which phenolics change soil N cycling and the factors that might alter the fate and role of phenolics in the ecosystem. I review five examples in which species with high concentrations of phenolic compounds known to interfere with growth of other plants (Cistus albidus, Ledum palustre, Empetrum hermaphroditum, Populus balsamifera and Kalmia angustifolia) decrease N availability in natural conditions. In those studies, phenolics do not affect N cycling in natural systems by forming complexes with proteins, as traditionally stated, but by increasing microbial activity after being degraded by microorganisms. The presence of phenolics in plants could be a result of a selective pressure in situations where changing soil chemical properties increase plant competitive ability.