Background: Tussock tundra is a main component of the Low Arctic vegetation cover. As it is adapted to underlying permafrost, its marginal sites at its southern distribution limit could be excellent indicators of climate change. There are still some scattered outpost stands of tussock tundra in the subarctic-alpine area of northern Fennoscandia, now showing signs of decline. Aims: The objective was to document changes in community structure of the tussock tundra over a 12-year period in experimentally warmed plots and in non-manipulated controls. In addition, the study included a survey of the present cover of tussock tundra in northern Swedish Lapland and a long-term monitoring of annual flowering intensity in the dominant species, the arctic hare’s-tail cottongrass, Eriophorum vaginatum. Methods: The extent of tussock tundra in the region was assessed in a helicopter survey in 2005, followed by ground truthing in 2006. Climate and permafrost have been monitored at Latnjajaure, northern Swedish Lapland, since 1992. An experimental warming study employing open-top chambers (OTCs) was initiated at Latnjajaure for a number of habitats in 1993€-1995, and all tussock tundra plots were surveyed in 1995 and 2006. Non-manipulated, permanently marked E. vaginatum tussocks were monitored for flowering frequency annually in 1992-2008. Results: The helicopter survey indicated that tussock tundra covers only few km2 in northernmost Sweden. A stand at the lower end of its altitude range was already in an advanced stage of transition into shrub tundra. In the OTCs at Latnjajaure, evergreen boreal dwarf-shrubs (particularly Vaccinium vitis-idaea) increased in above-ground biomass about eightfold between 1995 and 2006, and almost fourfold in the controls. There has been a significant warming trend in the study area of 0.12 °C per year, likely explaining why the control plots have also changed. The annual monitoring of E. vaginatum flowering indicated a tendency for relaxed synchrony of masting episodes in recent years, probably caused by longer growing seasons. Conclusions: Tussock tundra stands at the southern margin of the ecosystem’s range are undergoing rapid changes at present. Increased air temperature and permafrost degradation are likely to be the main drivers of the observed change.