Background: Considerable changes in vegetation structure and distribution are predicted in high latitude ecosystems as a result of amplified climate change. However, some documented plant community changes do not follow model predictions. Aim: We compared the growth of and the responses to climate variation by the thermophilic aspen (Populus tremula) and its sub-Arctic competitor mountain birch (Betula pubescens ssp. czerepanovii) over the past 100 years. Methods: Repeat photography, high-resolution vegetation transects, dendro-ecological analysis, and local climate record archives were used to study changes in vitality and distributional range of the two tree species in response to climate variability. Results: Aspen grew 45% faster and had seven times higher recruitment numbers than birch. However, no aspen stand expansion was observed, most likely because of browsing by moose (Alces alces). Birch, on the other hand, suffered from cyclic outbreaks of the autumnal moth (Epirrita autumnata). One-hundred-year-old birch trees experienced on average 9.0 years of reduced growth due to moth herbivory compared to 1.4 years for aspen. Moreover, these moth outbreaks on birch stimulated recruitment of aspen in birch stands. Conclusions: As the sub-Arctic continues to become warmer, the dynamics between aspen and birch in forest ecosystems will likely depend on the number of vertebrate browsers relative to the number of aspen recruits, while major moth outbreaks on birch may facilitate the spread of aspen by reducing competition. Our results suggest that alternating episodes of apparent species range stabilities (homeostasis) and abrupt non-linear shifts may characterise species migration patterns in this ecosystem.