Peatlands in continuous permafrost regions represent a globally-important store of organic carbon, the stability of which is thought to be at risk under future climatic warming. To better understand how these ecosystems may change in a warmer future, we use a palaeoenvironmental approach to reconstruct changes in two peatlands near Toolik Lake on Alaska's North Slope (TFS1 and TFS2). We present the first testate amoeba-based reconstructions from peatlands in continuous permafrost, which we use to infer changes in water-table depth and porewater electrical conductivity during the past two millennia. TFS1 likely initiated during a warm period between 0 and 300 CE. Throughout the late-Holocene, both peatlands were minerotrophic fens with low carbon accumulation rates (means of 18.4 and 14.2 g C m−2 yr−1 for cores TFS1 and TFS2 respectively). However, since the end of the Little Ice Age, both fens have undergone a rapid transition towards oligotrophic peatlands, with deeper water tables and increased carbon accumulation rates (means of 59.5 and 48.2 g C m−2 yr−1 for TFS1 and TFS2 respectively). We identify that recent warming has led to these two Alaskan rich fens to transition into poor fens, with greatly enhanced carbon accumulation rates. Our work demonstrates that some Arctic peatlands may become more productive with future regional warming, subsequently increasing their ability to sequester carbon.