Aims: This study aimed at elucidating divergent effects of two dominant plant functional types (PFTs) in tundra heath, dwarf shrubs and mosses, on soil microbial processes and soil carbon (C) and nutrient availability, and thereby to enhance our understanding of the complex interactions between PFTs, soil microbes and soil functioning. Methods: Samples of organic soil were collected under three dwarf shrub species (of distinct mycorrhizal association and life form) and three moss species in early and late growing season. We analysed soil C and nutrient pools, extracellular enzyme activities and phospholipid fatty acid profiles, together with a range of plant traits, soil and abiotic site characteristics. Results: Shrub soils were characterised by high microbial biomass C and phosphorus and phosphatase activity, which was linked with a fungal-dominated microbial community, while moss soils were characterised by high soil nitrogen availability, peptidase and peroxidase activity associated with a bacterial-dominated microbial community. The variation in soil microbial community structure was explained by mycorrhizal association, root morphology, litter and soil organic matter quality and soil pH-value. Furthermore, we found that the seasonal variation in microbial biomass and enzyme activities over the growing season, likely driven by plant belowground C allocation, was most pronounced under the tallest shrub Betula nana. Conclusion: Our study demonstrates a close coupling of PFTs with soil microbial communities, microbial decomposition processes and soil nutrient availability in tundra heath, which suggests potential strong impacts of global change-induced shifts in plant community composition on carbon and nutrient cycling in high-latitude ecosystems.