Arctic environmental change induces shifts in high-latitude plant community composition and stature with implications for Arctic carbon cycling and energy exchange. Two major components of change in high-latitude ecosystems are the advancement of trees into tundra and the increased abundance and size of shrubs. How future changes in key climatic and environmental drivers will affect distributions of major ecosystem types is an active area of research. Dynamic vegetation models (DVMs) offer a way to investigate multiple and interacting drivers of vegetation distribution and ecosystem function. We employed the LPJ-GUESS tree-individual-based DVM over the Torneträsk area, a sub-arctic landscape in northern Sweden. Using a highly resolved climate dataset to downscale CMIP5 climate data from three global climate models and two 21st-century future scenarios (RCP2.6 and RCP8.5), we investigated future impacts of climate change on these ecosystems. We also performed model experiments where we factorially varied drivers (climate, nitrogen deposition and [CO2]) to disentangle the effects of each on ecosystem properties and functions. Our model predicted that treelines could advance by between 45 and 195 elevational metres by 2100, depending on the scenario. Temperature was a strong driver of vegetation change, with nitrogen availability identified as an important modulator of treeline advance. While increased CO2 fertilisation drove productivity increases, it did not result in range shifts of trees. Treeline advance was realistically simulated without any temperature dependence on growth, but biomass was overestimated. Our finding that nitrogen cycling could modulate treeline advance underlines the importance of representing plant–soil interactions in models to project future Arctic vegetation change.