Almost half of the global terrestrial soil carbon (C) is stored in the northern circumpolar permafrost region, where air temperatures are increasing two times faster than the global average. As climate warms, permafrost thaws and soil organic matter becomes vulnerable to greater microbial decomposition. Long-term soil warming of ice-rich permafrost can result in thermokarst formation that creates variability in environmental conditions. Consequently, plant and microbial proportional contributions to ecosystem respiration may change in response to long-term soil warming. Natural abundance δ¹³ C and Δ¹⁴ C of aboveground and belowground plant material, and of young and old soil respiration were used to inform a mixing model to partition the contribution of each source to ecosystem respiration fluxes. We employed a hierarchical Bayesian approach that incorporated gross primary productivity and environmental drivers to constrain source contributions. We found that long-term experimental permafrost warming introduced a soil hydrology component that interacted with temperature to affect old soil C respiration. Old soil C loss was suppressed in plots with warmer deep soil temperatures because they tended to be wetter. When soil volumetric water content significantly decreased in 2018 relative to 2016 and 2017, the dominant respiration sources shifted from plant aboveground and young soil respiration to old soil respiration. The proportion of ecosystem respiration from old soil C accounted for up to 39% of ecosystem respiration and represented a 30-fold increase compared to the wet-year average. Our findings show that thermokarst formation may act to moderate microbial decomposition of old soil C when soil is highly saturated. However, when soil moisture decreases, a higher proportion of old soil C is vulnerable to decomposition and can become a large flux to the atmosphere. As permafrost systems continue to change with climate, we must understand the thresholds that may propel these systems from a C sink to a source.