Changes in permafrost and vegetation dynamics in warming Arctic regions affect global greenhouse gas emissions. This thesis studies changes in climate, shrub vegetation, and permafrost in an understudied Siberian tundra region. Field experiments and monitoring, satellite images and dendrochronology indicate that this ecosystem shows shrub decline and increase of open water features resulting from abrupt permafrost thaw (thermokarst). Thermokarst features show partial recovery of permafrost on decadal timescales, assisted by aquatic vegetation succession. However, degradation rates outpace long term recovery of permafrost and shrub vegetation on the landscape level. Vegetation productivity (NDVI) has shown strong decreases in recent years with dry summers, extreme snowfall and floods. High rainfall during warm summers promotes shrub growth and vegetation productivity, but also substantially enhances permafrost degradation for multiple years. The impacts of increasingly variable Arctic precipitation on heterogeneous tundra landscapes are spatio-temporally diverse, which poses a challenge for assessment of the future Arctic.