Our understanding of positive and negative plant interactions is primarily based on vascular plants, as is the prediction that facilitative effects dominate in harsh environments. It remains unclear whether this understanding is also applicable to moss-vascular plant interactions, which are likely to be influential in low-temperature environments with extensive moss ground cover such as boreal forest and arctic tundra. In a field experiment in high-arctic tundra, we investigated positive and negative impacts of the moss layer on vascular plants. Ramets of the shrub Salix polaris, herb Bistorta vivipara, grass Alopecurus borealis and rush Luzula confusa were transplanted into plots manipulated to contain bare soil, shallow moss (3 cm) and deep moss (6 cm) and harvested after three growing seasons. The moss layer had both positive and negative impacts upon vascular plant growth, the relative extent of which varied among vascular plant species. Deep moss cover reduced soil temperature and nitrogen availability, and this was reflected in reduced graminoid productivity. Shrub and herb biomass were greatest in shallow moss, where soil moisture also appeared to be highest. The relative importance of the mechanisms by which moss may influence vascular plants, through effects on soil temperature, moisture and nitrogen availability, was investigated in a phytotron growth experiment. Soil temperature, and not nutrient availability, determined Alopecurus growth, whereas Salix only responded to increased temperature if soil nitrogen was also increased. We propose a conceptual model showing the relative importance of positive and negative influences of the moss mat on vascular plants along a gradient of moss depth and illustrate species-specific outcomes. Our findings suggest that, through their strong influence on the soil environment, mat-forming mosses structure the composition of vascular plant communities. Thus, for plant interaction theory to be widely applicable to extreme environments such as the Arctic, growth forms other than vascular plants should be considered.