Climatic warming leads to the expansion of deciduous shrubs and trees in the Arctic. This leads to higher leaf litter inputs, which together with warming may alter the rate of carbon and nutrient cycling in the arctic ecosystems. We assessed effects of factorial warming and additional litter on the soil ecosystem of a subarctic heath in a 7-year-long field experiment. Fine root biomass, dissolved organic carbon (DOC) and total C concentration increased in response to warming, which probably was a result of the increased vegetation cover. Litter addition increased the concentration of inorganic P in the uppermost 5 cm soil, while decreasing the pool of total P per unit area of the organic profile and having no significant effects on N concentrations or pools. Microbial biomass C and N were unaffected by the treatments, while the microbial biomass P increased significantly with litter addition. Soil ergosterol concentration was also slightly increased by the added litter in the uppermost soil, although not statistically significantly. According to a principal component analysis of the phospholipid fatty acid profiles, litter addition differed from the other treatments by increasing the relative proportion of biomarkers for Gram-positive bacteria. The combined warming plus litter addition treatment decreased the soil water content in the uppermost 5 cm soil, which was a likely reason for many interactions between the effects of warming and litter addition. The soil organic matter quality of the combined treatment was also clearly different from the control based on a near-infrared reflectance (NIR) spectroscopic analysis, implying that the treatment altered the composition of soil organic matter. However, it appears that the biological processes and the microbial community composition responded more to the soil and litter moisture conditions than to the change in the quality of the organic matter.