Rapid climate change in the Arctic and Sub-Arctic is causing vegetation change across large areas of tundra. Shrubs and trees are undergoing range expansions as part of an over-all trend of ‘greening’ of the tundra. This is of importance because northern peatlands contain around half of total soil carbon (C) and there is a potential for productive vegetation to interact with this C in a number of ways: (1) Ectomycorrhizal fungi (ECM) in symbiosis with trees and shrubs could potentially stimulate decomposition through extracellular enzyme production whilst extracting nitrogen (N) for their hosts; (2) deep snow, trapped by tall vegetation insulates the soil, resulting in higher winter-time microbial activity and has potential to influence growing season microbial activity; (3) the biochemistry of litter and decomposition environment associated with more productive vegetation could result in accelerated mass loss of litter and stimulate decomposition of older soil C. This thesis investigates how productive sub-arctic plant species in Northern Sweden interact with soil C by using ‘space-for-time’ transitions from forests (Betula pubescens), through intermediate shrub vegetation (Betula, Salix), to tundra heath (Empetrum nigrum). This was to test how ECM fungi, winter snow accumulation, defoliation events and litter input influence C cycling. C stocks, respiration rates and ECM growth rates were measured across these ecotones. It was found that birch forests and shrub stands had significantly lower soil C storage and higher respiration rates than adjacent heaths. This is contrary to the predictions of earth system models. Higher ECM growth rates at plots with low C storage and high cycling rates implied that they had an important role in the stimulation of C decomposition. To test whether snow cover in forests over winter had an important effect on C cycling, soils were transplanted between forest and heath (different snow cover), and respiration rates were measured over summer. It was found that deep snow cover over winter increases microbial activity in summer due to a warmer, more stable winter environment; this is hypothesised to be due to the environmental selection of a more active assemblage of decomposing microbes. A defoliation event of part of the birch forest by caterpillars allowed for a natural ‘experiment’. Trees with different degrees of defoliation were compared in their influence over soil C cycling processes. Defoliated plots shifted to slower-cycling states through a shift in the ECM community. This further implied that ECM fungi have an important role to play in rapid cycling of C in forests. A decomposition experiment using the litter of significant plant species in forest, shrub and heath communities was carried out by transplanting them between these key environments. This work showed that rapid decomposition of litter in the forest is driven by an interaction between carbohydrate-rich litter input and an effective decomposer community. This work addresses the relationship between vegetation productivity and C storage in the soil. This theme runs through every experiment as they test specific interactions between different plant groups and the soil. The results from this thesis suggest that increasing productivity and shrub expansion in the Arctic will stimulate decomposition of soil C via a number of pathways. Plant-soil interactions are clearly of importance in determining the fate of C in ecosystems and will play a key part in the balance of C in the future.