In the Arctic, environmental factors governing microbial degradation of soil carbon (C) in active layer and permafrost are poorly understood. Here we determined the functional potential of soil microbiomes horizontally and vertically across a cryoperturbed polygonal landscape in Alaska. With comparative metagenomics, genome binning of novel microbes, and gas flux measurements we show that microbial greenhouse gas (GHG) production is strongly correlated to landscape topography. Active layer and permafrost harbor contrasting microbiomes, with increasing amounts of Actinobacteria correlating with decreasing soil C in permafrost. While microbial functions such as fermentation and methanogenesis were dominant in wetter polygons, in drier polygons genes for C mineralization and CH4 oxidation were abundant. The active layer microbiome was poised to assimilate N and not to release N2O, reflecting low N2O flux measurements. These results provide mechanistic links of microbial metabolism to GHG fluxes that are needed for the refinement of model predictions.