Arctic ecosystems are known to be extremely vulnerable to climate change. As the Intergovernmental Panel on Climate Change scenarios project extreme climate events to increase in frequency and severity, we exposed High Arctic tundra plots during 8 days in summer to a temperature rise of approximately 9°C, induced by infrared irradiation, followed by a recovery period. Increased plant growth rates during the heat wave, increased green cover at the end of the heat wave and higher chlorophyll concentrations of all four predominating species (Salix arctica Pall., Arctagrostis latifolia Griseb., Carex bigelowii Torr. ex Schwein and Polygonum viviparum L.) after the recovery period, indicated stimulation of vegetative growth. Improved plant performance during the heat wave was confirmed at plant level by higher leaf photochemical efficiency (Fv/Fm) and at ecosystem level by increased gross canopy photosynthesis. However, in the aftermath of the temperature extreme, the heated plants were more stressed than the unheated plants, probably because they acclimated to warmer conditions and experienced the return to (low) ambient as stressful. We also calculated the impact of the heat wave on the carbon balance of this tundra ecosystem. Below- and aboveground respiration were stimulated by the instantaneous warmer soil and canopy, respectively, outweighing the increased gross photosynthesis. As a result, during the heat wave, the heated plots were a smaller sink compared with their unheated counterparts, whereas afterwards the balance was not affected. If other High Arctic tundra ecosystems react similarly, more frequent extreme temperature events in a future climate may shift this biome towards a source. It is uncertain, however, whether these short-term effects will hold when C exchange rates acclimate to higher average temperatures.