Rapid climate warming in the Arctic threatens to destabilize vast stocks of soil carbon (C) that have accumulated over millennia, which could amplify the C-climate feedback. However, climate-induced shrub expansion may counteract these losses if their higher-quality litter (lower C:N) is efficiently incorporated into microbial products and stabilized within the soil. Alternatively, increased C inputs could stimulate microbial decomposition of old soil organic matter (SOM) through priming mechanisms. We investigated whether inputs of low molecular weight carbon (LMW-C) induced SOM priming or retention in soils underlying Eriophorum vaginatum , an ubiquitous tussock-forming sedge, and Betula nana, a dominant shrub that is expanding its range and coverage across the Arctic. We did not find evidence of priming, defined as an increase in the decomposition of native SOM stocks, from soils underlying either vegetation type. However, microbial respiration of new LMW-C inputs was twice as high in soils underlying E. vaginatum than B. nana, while belowground retention of new LMW-C inputs was 150% higher in soils underlying B. nana. Our results highlight the extraordinary capacity of shrub-colonized soils to retain new C inputs belowground, which may mitigate soil C loss as the Arctic climate warms. [ABSTRACT FROM AUTHOR]