We investigated the size, distribution, and temporal dynamics of ecosystem carbon (C) pools in an area of recent tree line advance, northwest Alaska. Repeat aerial photographs show forest cover increased ∼10% in our study area since 1949. We sampled C pools of four principal ecosystem types, tussock tundra, shrub tundra, woodland, and forest, all located on a 600–800 year old river terrace. Significant differences between ecosystem C pools, both above ground and below ground existed. Tundra sites store >22.2 kg C/m², shrub tundra sites and woodland sites store 9.7 kg C/m² and 14.3 kg C/m², respectively, and forest sites store 14.4 kg C/m². Landscape variation of total ecosystem C was primarily due to organic soil C and was secondarily due to C stored in trees. Soil C/N profiles of shrub tundra sites and woodland sites showed similarities with forest site soils at surface and tundra site soils at depth. We hypothesize that tundra systems transformed to forest systems in this area under a progression of permafrost degradation and enhanced drainage. On the basis of C pool estimates for the different ecosystem types, conversion of tundra sites to forest may have resulted in a net loss of >7.8 kg C/m², since aboveground C gains were more than offset by belowground C losses to decomposition in the tundra sites. Tree line advance therefore might not increase C storage in high-latitude ecosystems and thus might not, as previously suggested, act as a negative feedback to warming. Key to this hypothesis and to its projection to future climate response is the fate of soil carbon upon warming and permafrost drainage.