Global warming is enhancing the mobilization of organic carbon (C) from Arctic soils into streams, where it can be mineralized to CO₂ and released to the atmosphere. Abiotic photo‐oxidation might drive C mineralization, but this process has not been quantitatively integrated with biological processes that also influence CO₂ dynamics in aquatic ecosystems. We measured CO₂ concentrations and the isotopic composition of dissolved inorganic C (δ¹³C_DIC) at diel resolution in two Arctic streams, and coupled this with whole‐system metabolism estimates to assess the effect of biotic and abiotic processes on stream C dynamics. CO₂ concentrations consistently decreased from night to day, a pattern counter to the hypothesis that photo‐oxidation is the dominant source of CO₂. Instead, the observed decrease in CO₂ during daytime was explained by photosynthetic rates, which were strongly correlated with diurnal changes in δ¹³C_DIC values. However, on days when modeled photosynthetic rates were near zero, there was still a significant diel change in δ¹³C_DIC values, suggesting that metabolic estimates are partly masked by O₂ consumption from photo‐oxidation. Our results suggest that 6–12 mmol CO₂‐C m⁻² d⁻¹ may be generated from photo‐oxidation, a range that corresponds well to previous laboratory measurements. Moreover, ecosystem respiration rates were 10 times greater than published photo‐oxidation rates for these Arctic streams, and accounted for 33–80% of total CO₂ evasion. Our results suggest that metabolic activity is the dominant process for CO₂ production in Arctic streams. Thus, future aquatic CO₂ emissions may depend on how biotic processes respond to the ongoing environmental change.