Vegetation change, permafrost degradation and their interactions affect greenhouse gas fluxes, hydrology and surface energy balance in Arctic ecosystems. The Arctic shows an overall “greening” trend (i.e. increased plant biomass and productivity) attributed to expansion of shrub vegetation. However, Arctic shrub dynamics show strong spatial variability and locally “browning” may be observed. Mechanistic understanding of greening and browning trends is necessary to accurately assess the response of Arctic vegetation to a changing climate. In this context, the Siberian Arctic is an understudied region. Between 2010 and 2019, increased browning (as derived from the MODIS Enhanced Vegetation Index) was observed in the Eastern Siberian Indigirka Lowlands. To support interpretation of local greening and browning dynamics, we quantified changes in land cover and transition probabilities in a representative tundra site in the Indigirka Lowlands using a timeseries of three very high resolution (VHR) (0.5 m) satellite images acquired between 2010 and 2019. Using spatiotemporal Potts model regularization, we substantially reduced classification errors related to optical and phenological inconsistencies in the image material. VHR images show that recent browning was associated with declines in shrub, lichen and tussock vegetation and increases in open water, sedge and especially Sphagnum vegetation. Observed formation and expansion of small open water bodies in shrub dominated vegetation suggests abrupt thaw of ice-rich permafrost. Transitions from open water to sedge and Sphagnum, indicate aquatic succession upon disturbance. The overall shift towards open water and wetland vegetation suggests a wetting trend, likely associated with permafrost degradation. Landsat data confirmed widespread expansion of surface water throughout the Indigirka Lowlands. However, the increase in the area of small water bodies observed in VHR data was not visible in Landsat-derived surface water data, which suggests that VHR data is essential for early detection of small-scale disturbances and associated vegetation change in permafrost ecosystems. Display omitted •The Indigirka Lowlands show a wetting trend and divergent greening/browning.•VHR data revealed shrub decline and surface water and wetland vegetation expansion.•Thermokarst and terrain wetting explain local shrub decline and tundra browning.•Accurate VHR change detection is essential for monitoring of Arctic ecosystems.