Microbial permafrost communities play an important role in carbon cycling and greenhouse gas fluxes. Despite the importance of these processes, there is a lack of knowledge about how environmental and climatic changes affect the abundance and composition of microorganisms. Here, we investigated the changing distribution of permafrost microorganisms in response to climate and lake-level changes. The permafrost core was drilled at the near shore of Lake El'gygytgyn, Far East Russian Arctic, and a combined microbiological and lipid biomarker approach was applied. The lower part of the permafrost core, deposited under subaquatic conditions, contains only small amounts of microbial signals; total organic carbon (TOC) content is sparse. After exposure of the site to subaerial conditions during the AllerOd, the abundance of Bacteria and Archaea started to increase and the lake-level change is especially evidenced by the relative proportion of archaeal biomarkers. This increase is supported by rising bacterial and archaeal 16S ribosomal ribonucleic acid (rRNA) gene copy numbers and significant amounts of TOC during the late AllerOd. After a small decrease during the colder Younger Dryas, the TOC content and the microbial signals strongly increase during the Holocene, presumably stimulated by pedogenesis. The occurrence of intact phospholipids indicates the presence of living microorganisms in these deposits. Our data suggest that methane formation is mainly expected for the subaerial interval, especially the Holocene where methanogens were identified by fingerprinting. This study emphasises the role of the uppermost permafrost deposits as a hotspot of carbon cycling in arctic environments, especially in the light of expected future global warming. Copyright (c) 2014 John Wiley & Sons, Ltd.