Labile carbon, although often a small fraction of soil organic carbon (SOC), significantly affects heterotrophic respiration at short timescales because of its rapid decomposition. However, in the current literature, most soil respiration measurements are interpreted without simultaneous information on labile carbon pool dynamics. Sensitivity of soil respiration to temperature is routinely derived directly from field observations, and such relationships have been used to extrapolate effects of global change (e.g., warming) on carbon emission from SOC. Here we use a multipool SOC model to demonstrate the impacts of seasonal fluctuations of labile carbon pools on interpretation of soil respiration measurements. We find that labile carbon pool sizes vary widely in response to seasonal changes in representative plant material inputs and temperature even though the model is operating at equilibrium in terms of annual means. Convolution of the dynamics of fast turnover carbon pools and temporal progression in temperature lead to misrepresentation and misinterpretation of the heterotrophic respiration-temperature relationships estimated from bulk soil CO2 exchanges. Temperature sensitivity is overestimated when the variations of labile carbon pools and temperature are in phase and underestimated when they are out of phase. Furthermore, with normally used observation time windows (weeks to a year), temperature sensitivity is more likely to be underestimated. A distortion of temperature sensitivity (Q10) from 2 (actual, sensitive dependence on temperature) to nearly 1 (false, no dependence on temperature) is shown. Applying estimated temperature sensitivity parameter back into the model considerably overestimates soil carbon storage at equilibrium. Our findings indicate that caution must be taken when soil respiration-temperature relationships are evaluated based on bulk soil observations and when sensitivity of soil respiration to temperature estimated directly under field conditions is used to predict future carbon cycle-climate feedbacks.