High latitudes contain nearly half of global soil carbon, prompting interest in understanding how the Arctic terrestrial carbon balance will respond to rising temperatures. Low temperatures suppress the activity of soil biota, retarding decomposition and nitrogen release, which limits plant and microbial growth. Warming initially accelerates decomposition, increasing nitrogen availability, productivity and woody-plant dominance. However, these responses may be transitory, because coupled abiotic-biotic feedback loops that alter soil-temperature dynamics and change the structure and activity of soil communities, can develop. Here we report the results of a two-decade summer warming experiment in an Alaskan tundra ecosystem. Warming increased plant biomass and woody dominance, indirectly increased winter soil temperature, homogenized the soil trophic structure across horizons and suppressed surface-soil-decomposer activity, but did not change total soil carbon or nitrogen stocks, thereby increasing net ecosystem carbon storage. Notably, the strongest effects were in the mineral horizon, where warming increased decomposer activity and carbon stock: a 'biotic awakening' at depth.