Potting soil is formulated for the special needs of plants grown in containers, whether indoors or outside. Potted plants require optimal soil conditions to grow with their roots in a confined space. The basic ingredients of potting soil -- peat moss, sand, compost and vermiculite -- provide the key properties that allow potted plants to grow and thrive.
Potting soil is formulated to have sponge-like properties, holding more moisture longer than ordinary soil would. Peat moss, shredded bark or coconut husks give potting soil this property. Compost and either vermiculite or perlite, two forms of volcanic rock, also will hold a lot of water relative to their volume. Outdoor potted plants exposed to sun and wind will dry out much faster than those planted in your garden soil. These plants need frequent watering and a moisture-retaining soil. Indoor potted plants also benefit from a soil that holds water well; the plants can go longer between waterings, and won't wilt when their owners are away for a week.
Although potting soil needs excellent water-retention properties, it also must provide good drainage and air space. The roots of potted plants don't have much room, so they need to grow freely in a lightweight soil mixture. This is especially important when you're growing tender young seedlings or sensitive tropical houseplants, two of the main uses for potting soil. Peat moss, compost, and sand all contribute to a balance of air space and moisture in potting soil, but perlite and vermiculite are the ingredients added primarily for this purpose.
All the nutrients needed for plant growth must be supplied in the potting mix, because the plant is cut off from getting them through natural processes. The compost in the potting soil provides low levels of the major plant nutrients, as well as many trace minerals. Fertilizers such as blood meal, bone meal, urea, greensand, or rock phosphate may also be blended into the mix. These quickly leach out of potting soil, however, so they must be replaced if the soil is used for more than one growing season.
In nature, one cubic inch of topsoil contains millions of microscopic organisms. They carry out much of the work of decomposition and nutrient transfer, and play a role in the immunity of plants to disease. Some potting soils are sterilized to prevent the possibility of harboring disease organisms, while others are not, allowing the beneficial microbes to grow. Compost contains many of these beneficial microbes, but producers of high-quality potting mixes often take the extra step of introducing particular strains of bacteria and fungi for the added benefits. These potting soils are especially good for starting vegetable seedlings, while sterilized soil is a better bet for houseplants.