Recent accelerated decay of discontinuous permafrost at the Stordalen Mire in northern Sweden has been attributed to increased temperature and snow depth, and has caused expansion of wet minerotrophic areas leading to significant changes in carbon cycling in the mire. In order to track these changes through time and evaluate potential forcing mechanisms, this paper analyses a peat succession and a lake sediment sequence from within the mire, providing a record for the last 100 years, and compares these with monitored climate and active layer thickness data. The peat core was analysed for testate amoebae to reconstruct changes in peatland surface moisture conditions and water table fluctuations. The lake sediment core was analysed by near infrared spectroscopy to infer changes in the total organic carbon (TOC) concentration of the lake-water, and changes in δ13C and C, N and δ15N to track changes in the dissolved inorganic carbon (DIC) pool and the influence of diagenetic effects on sediment organic matter, respectively. Results showed that major shifts towards increased peat surface moisture and TOC concentration of the lake-water occurred around 1980, one to two decades earlier than a temperature driven increase in active layer thickness. Comparison with monitored temperature and precipitation from a nearby climate station indicates that this change in peat surface moisture is related to June–September (JJAS) precipitation and that the increase in lake-water TOC concentration reflects an increase in total annual precipitation. A significant depletion in 13C of sediment organic matter in the early 1980s probably reflects the effect of a single or a few consecutive years with anomalously high summer precipitation, resulting in elevated DIC content of the lake water, predominantly originating from increased export and subsequent respiration of organic carbon from the mire. Based on these results, it was not possible to link proxy data obtained on peat and lake-sediment records directly to permafrost decay. Instead our data indicate that increased precipitation and anomalously high rainfall during summers had a significant impact on the mire and the adjacent lake ecosystem. We therefore propose that effects of increased precipitation should be considered when evaluating potential forcing mechanisms of recent changes in carbon cycling in the subarctic.