Traffic derived nitrogen (N) and heavy metal pollution is a well-known phenomenon, but little explored in otherwise pristine ecosystems such as subarctic tundra. Here, the main source of N input to the ecosystem is via N2 fixation by moss- and lichen-associated bacteria. While inhibitory effects of N deposition on moss-associated N2 fixation have been reported, we still lack understanding of the effects of traffic derived N and heavy metal deposition on this ecosystem function in an otherwise pristine setting. To test this, we established a distance gradient (0–1280 m) away from a metal pollution source -a railway transporting iron ore that passes through a subarctic birch forest. We assessed the effects of railway-derived pollution on N2 fixation associated with two moss species Pleurozium schreberi, Hylocomium splendens and with the lichen Peltigera aphthosa. Deposition and availability of N and heavy metals (Fe, Cu, Zn, Pb) as well as the respective contents in moss, lichen and soil was assessed. While we found a steep gradient in metal concentration in moss, lichen and soil with distance away from the pollution source, N deposition did not change, and with that, we could not detect a distance gradient in moss- or lichen-associated N2 fixation. Hence, our results indicate that N2 fixing bacteria are either not inhibited by heavy metal deposition, or that they are protected within the moss carpet and lichen tissue.