The response of arctic ecosystems to global change will have critical effects on future climate. These ecosystems are experiencing the greatest rates of warming globally and store over half the worlds soil carbon (C). Climate warming has already triggered the expansion of shrubs across tundra, raising questions about how shrubs will affect ecosystem C balance. Shrub functional traits like litter quality and mycorrhizal symbionts may accelerate the activity of soil microorganisms by increasing the rate of C inputs and changing the chemical composition of soil organic matter (SOM). In this dissertation, I investigated four mechanisms by which shrubs may affect the activity of soil microorganisms by comparing shrub and non-shrub soils using a combination of manipulative lab incubations and field experiments Specifically, I tested whether shrubs stimulate heterotrophic activity and C loss by 1) their litter inputs; 2) increasing the availability of soil nitrogen (N) and phosphorus (P); 3) promoting more labile SOM relative to non-shrub species; and 4) producing root systems with stronger stimulatory effects on microbial activity. I found evidence that shrubs stimulate soil heterotrophic respiration, but microbes responded uniformly to litter addition, regardless of soil origin. I found no evidence that shrubs alter microbial N and/or P limitation on soil microbes, but are limited by P. I also found that long-term warming reduced C and N stocks in sub-arctic tundra, but did not uniformly stimulate increases to microbial activity or C loss. My final dissertation chapter demonstrated that roots are the primary drivers of microbial activity in arctic soils, regardless of species identity. I also found evidence that shrub-induced changes to soil organic matter quality may increase microbial activity in organic soils. Further, I found that the relationship between soil C content and root growth was strongly horizon dependent, with increasing root growth leading to greater C content in organic soils and lower C content in mineral soils. Interestingly, shrub roots appear to ameliorate this negative relationship in the mineral horizon. Collectively, my results suggest that shrubs are fundamentally modifying C cycling, and are changing the chemical composition and spatial distribution of C stored in arctic ecosystems.