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Abstract A significant warming effect on arctic tundra is greening. Although this increase in predominantly woody vegetation has been linked to increases in gross primary productivity, increasing temperatures also stimulate ecosystem respiration. We present a novel analysis from small-scale plot measurements showing that the shape of the temperature- and light-dependent sink-to-source threshold (where net ecosystem exchange (NEE) equals zero) differs between two tussock tundra ecosystems differing in leaf area index (LAI). At the higher LAI site, the threshold is exceeded (i.e the ecosystem becomes a source) at relatively higher temperatures under low light but at lower temperatures under high light. At the lower LAI site, the threshold is exceeded at relatively lower temperatures under low light but at higher temperatures under high light. We confirmed this response at a single site where LAI was experimentally increased. This suggests the carbon balance of the tundra may be sensitive to small increases in temperature under low light, but that this effect may be significantly offset by increases in LAI. Importantly, we found that this LAI effect is reversed under high light, and so in a warming tundra, greater vegetation cover could have a progressively negative effect on net carbon uptake.