Soil nutrient supply is likely to change in the Arctic due to altered process rates associated with climate change. Here, we compare the responses of herbaceous tundra and birch forest understory to fertilization, considering both above- and below-ground responses. We added nitrogen and phosphorus to plots in both vegetation types for three years near Abisko, northern Sweden, and measured the effect on above- and below-ground plant community properties and soil characteristics. Fertilization increased ground-layer shoot mass, the cover of grasses, and tended to enhance total root length below-ground, while it reduced the cover of low statured deciduous dwarf-shrubs. The only statistically significant interaction between vegetation type and fertilization was for grass cover, which increased twofold in forest understory but sixfold in tundra following fertilization. The lack of interactions for other variables suggests that the ground layers in these contrasting vegetation types have similar responses to fertilization. The nutrient-driven increase in grass cover and species-specific differences in productivity and root characters may alter ecosystem dynamics and C cycling in the long-term, but our study indicates that the response of birch forest understory and tundra vegetation may be consistent.