Continuous observation over the last decade has revealed evidence of abrupt land surface moistening as well as rapid soil warming within the active layer and upper part of permafrost within the central Lena River basin in eastern Siberia. The present study examined the relationship between permafrost degradation and ecohydrological change in this region. Increases in the depth of the active layer recorded since the winter of 2004 resulting from increases in moisture saturation within the soil have resulted in thawing the upper permafrost causing thermokarst subsidence, which has negatively impacted the growth of boreal (larch) forests in the region. According to multi-year sap flow measurements taken between 2006 and 2009, transpiration from larch trees (Larix cajanderi Mayr.) was significantly reduced as a result of the region's concave micro-topography, which, in conjunction with the deepening and moistening of the active layer, created perennially waterlogged conditions that left mature trees withered and dead. Several trees with reduced amounts of foliage showed a remarkable reduction in seasonal average canopy stomatal conductance during the 2009 growing season. The reduction ratio of canopy stomatal conductance within emergent trees of heights greater than 15 m between 2006 and 2009 had a significant positive correlation with the increase in thickness of the active layer over that same period. These findings indicated that wetting trends in a permafrost region caused by arctic climate change may lead to unexpected ecohydrological responses with respect to permafrost degradation in eastern Siberia. Copyright © 2013 John Wiley & Sons, Ltd.