Negative stable carbon isotope excursions (CIEs) across the Paleocene–Eocene thermal maximum (PETM; ∼56 Ma) range between 2‰ and 7‰, even after discounting sections with truncated records. Individual carbon isotope records differ in shape and magnitude from variations in the global exogenic carbon cycle through changes in (1) the relative abundance of mixed components with different δ13C within a measured substrate, (2) isotope fractionation through physiological change, and (3) the isotope composition of the carbon source. All three factors likely influence many early Paleogene δ13C records, especially across the PETM and other hyperthermal events. We apply these concepts to late Paleocene–early Eocene (∼58–52 Ma) records from Lomonosov Ridge, Arctic Ocean. Linear regression analyses show correlations between the δ13C of total organic carbon (TOC) and two proxies for the relative contribution of terrestrial organic components to sediment TOC: the branched and isoprenoid tetraether index and palynomorphs. We use these correlations to subtract the terrestrial component from δ13CTOC and calculate marine organic matter δ13C. The results show that the magnitude of the CIE in δ13CTOC across the PETM is exaggerated relative to the magnitude of the CIE in δ13CMOM by ∼3‰ due to increased contributions of terrestrial organic carbon during the event. Collectively, all carbon isotope records across the PETM and other major climate–carbon cycle perturbations in Earth's history are potentially biased through one or more of the above factors. Indeed, it is highly unlikely that any δ13C record shows the true shape and magnitude of the CIE for the global exogenic carbon cycle. For the PETM, we conclude that CIE in the exogenic carbon cycle is likely <4‰, but it will take additional analyses and modeling to obtain an accurate value for this CIE.