Enormous quantities of the free-floating freshwater fern Azolla grew and reproduced in situ in the Arctic Ocean during the middle Eocene, as was demonstrated by microscopic analysis of microlaminated sediments recovered from the Lomonosov Ridge during Integrated Ocean Drilling Program (IODP) Expedition 302. The timing of the Azolla phase (~48.5 Ma) coincides with the earliest signs of onset of the transition from a greenhouse towards the modern icehouse Earth. The sustained growth of Azolla, currently ranking among the fastest growing plants on Earth, in a major anoxic oceanic basin may have contributed to decreasing atmospheric pCO2 levels via burial of Azolla-derived organic matter. The consequences of these enormous Azolla blooms for regional and global nutrient and carbon cycles are still largely unknown. Cultivation experiments have been set up to investigate the influence of elevated pCO2 on Azolla growth, showing a marked increase in Azolla productivity under elevated (760 and 1910 ppm) pCO2 conditions. The combined results of organic carbon, sulphur, nitrogen content and 15N and 13C measurements of sediments from the Azolla interval illustrate the potential contribution of nitrogen fixation in a euxinic stratified Eocene Arctic. Flux calculations were used to quantitatively reconstruct the potential storage of carbon (0.9–3.5 1018 gC) in the Arctic during the Azolla interval. It is estimated that storing 0.9 1018 to 3.5 1018 g carbon would result in a 55 to 470 ppm drawdown of pCO2 under Eocene conditions, indicating that the Arctic Azolla blooms may have had a significant effect on global atmospheric pCO2 levels through enhanced burial of organic matter.