A peat deposit from the East European Russian Arctic, spanning nearly 10 000 years, was investigated to study soil organic matter degradation using analyses of bulk elemental and stable isotopic compositions and plant macrofossil remains. The peat accumulated initially in a wet fen that was transformed into a peat plateau bog following aggradation of permafrost in the late Holocene (∼2500 cal a BP). Total organic carbon and total nitrogen (N) concentrations are higher in the fen peat than in the moss-dominated bog peat layers. Layers in the sequence that have lower concentrations of total hydrogen (H) are associated with degraded vascular plant residues. C/N and H/C atomic ratios indicate better preservation of organic matter in peat material dominated by bryophytes as opposed to vascular plants. The presence of permafrost in the peat plateau stage and water-saturated conditions at the bottom of the fen stage appear to lead to better preservation of organic plant material. δ15N values suggest N isotopic fractionation was driven primarily by microbial decomposition whereas differences in δ13C values appear to reflect mainly changes in plant assemblages. Positive shifts in both δ15N and δ13C values coincide with a local change to drier conditions as a result of the onset of permafrost and frost heave of the peat surface. This pattern suggests that permafrost aggradation not only resulted in changes in vegetation but also aerated the underlying fen peat, which enhanced microbial denitrification, causing the observed 15N-enrichment. Copyright © 2012 John Wiley & Sons, Ltd.