Shrub communities have expanded in arctic and alpine tundra during recent decades. Changes in shrub abundance may alter ecosystem carbon (C) sequestration and storage, with potential positive or negative feedback on global C cycling. To assess potential implications of shrub expansion in different alpine plant communities, we compared C fluxes and pools in one Empetrum-dominated heath, one herb- and cryptogam-dominated meadow, and one Salix-shrub community in Central Norway. Over two growing seasons, we measured Gross Ecosystem Photosynthesis, Ecosystem Respiration (ER), and C pools for above-ground vegetation, litter, roots, and soil separated into organic and mineral horizons. Both the meadow and shrub communities had higher rates of C fixation and ER, but the total ecosystem C pool in the meadow was twice that of the shrub community because of more C in the organic soil horizon. Even though the heath community had the lowest rates of C fixation, it stored one and a half times more C than the shrub community. The results indicate that the relatively high above-ground biomass sequestering C during the growing season is not associated with high C storage in shrub-dominated communities. Instead, shrub-dominated areas may be draining the carbon-rich alpine soils because of high rates of decomposition. These processes were not shown by mid-growing season C fluxes, but were reflected by the very different distribution of C pools in the three habitats.