Arctic ecosystems are responding to unprecedented climate change with implications for the carbon cycle and feedbacks to global climate. The balance between carbon losses through increased soil respiration and carbon gains through changes in vegetation productivity will in part determine the strength of these feedbacks. Climate change is altering the productivity of arctic vegetation as well as the distribution of species within tundra ecosystems. However, gaps exist in our understanding of arctic vegetation, including how shifts in species with different growth forms and intra-specific variation impact the climate response of these ecosystems. In this dissertation, I utilize field observations and models to explore these knowledge gaps via a detailed investigation of the foundation arctic sedge Eriophorum vaginatum L. in tundra ecosystems. I first broadly investigated the role of the foundation tussock forming sedge E. vaginatum in tundra ecosystems and find that tussocks are a large climatically vulnerable arctic carbon stock. I then investigate E. vaginatum's unique tussock growth form and find that tiller root production and the carbon balance of the tussock mound are key to explaining tussock growth over time. Finally, I investigate the response of E. vaginatum ecotypes to climate and find that differences in morphology between ecotypes impact carbon cycling and that ecotypes differ in their response to climate. My dissertation shows that shifts in tundra species with different growth forms as well as variation within tundra species can have impacts on the C cycle and the response of tundra ecosystems to climate change. These results have implications for understanding and representing the role of E. vaginatum in tundra ecosystems. They also have implications for understanding the role of foundation species, tussock forming species, and ecotypes in the carbon cycle in other ecosystems.