UNLABELLED: PREMISE OF THE STUDY: Consequences of global climate change are detectable in the historically nitrogen- and phosphorus-limited Arctic tundra landscape and have implications for the terrestrial carbon cycle. Warmer temperatures and elevated soil nutrient availability associated with increased microbial activity may influence rates of photosynthesis and respiration. • METHODS: This study examined leaf-level gas exchange, cellular ultrastructure, and related leaf traits in two dominant tundra species, Betula nana, a woody shrub, and Eriophorum vaginatum, a tussock sedge, under a 3-yr-old treatment gradient of nitrogen (N) and phosphorus (P) fertilization in the North Slope of Alaska. • KEY RESULTS: Respiration increased with N and P addition-the highest rates corresponding to the highest concentrations of leaf N in both species. The inhibition of respiration by light ("Kok effect") significantly reduced respiration rates in both species (P < 0.001), ranged from 12-63% (mean 34%), and generally decreased with fertilization for both species. However, in both species, observed rates of photosynthesis did not increase, and photosynthetic nitrogen use efficiency generally decreased under increasing fertilization. Chloroplast and mitochondrial size and density were highly sensitive to N and P fertilization (P < 0.001), though species interactions indicated divergent cellular organizational strategies. • CONCLUSIONS: Results from this study demonstrate a species-specific decoupling of respiration and photosynthesis under N and P fertilization, implying an alteration of the carbon balance of the tundra ecosystem under future conditions.