The consequences of warming-induced ‘shrubification’ on Arctic soil carbon storage are receiving increased attention, as the majority of ecosystem carbon in these systems is stored in soils. Soil carbon cycles in these ecosystems are usually tightly coupled with nitrogen availability. Soil microbial responses to ‘shrubification’ may depend on the traits of the shrub species that increase in response to warming. Increase in deciduous shrubs such as Betula nana likely promotes a loss of soil carbon, whereas the opposite may be true if evergreen shrubs such as Empetrum hermaphroditum increase. We analyzed soil organic matter stocks and 13C NMR fractions, microbial CO2 respiration, biomass, extracellular enzyme activities (EEAs), and their association with shrub density in northern Sweden after 20 years of experimental warming using open top chambers (OTCs). Our study sites were located in a tundra heath that stores high soil carbon quantities and where the OTCs had increased deciduous shrubs, and in a mountain birch forest that stores lower soil carbon quantities and where the OTCs had increased evergreen shrubs. We predicted that organic matter stocks should be lower and respiration and EEAs higher inside the OTCs than untreated plots in the tundra, whereas no effect should be detected in the forest. Soil organic matter stocks and 13C NMR fractions remained unaffected at both sites. When expressed as per gram microbial biomass, respiration and EEAs for carbohydrate and chitin degradation were higher inside the OTCs, and contrasting our prediction, this effect was stronger in the forest. Unexpectedly, the OTCs also led to a substantially lower microbial biomass carbon and nitrogen irrespective of habitat. The decline in the microbial biomass counteracted increased activities resulting in no effect of the OTCs on respiration and a lower phenol oxidase activity per gram soil. Microbial biomass nitrogen correlated negatively with evergreen shrub density at both sites, indicating that ‘shrubification’ may have intensified nutrient competition between plants and soil microorganisms. Nutrient limitation could also underlie increased respiration per gram microbial biomass through limiting C assimilation into biomass. We hypothesize that increasing nutrient immobilization into long-lived evergreen shrubs could over time induce microbial nutrient limitation that contributes to a stability of accumulated soil organic matter stocks under climate warming.