The Arctic–Boreal Zone is rapidly warming, impacting its large soil carbon stocks. Here we use a new compilation of terrestrial ecosystem CO2 fluxes, geospatial datasets and random forest models to show that although the Arctic–Boreal Zone was overall an increasing terrestrial CO2 sink from 2001 to 2020 (mean ± standard deviation in net ecosystem exchange, −548 ± 140 Tg C yr−1; trend, −14 Tg C yr−1; P < 0.001), more than 30% of the region was a net CO2 source. Tundra regions may have already started to function on average as CO2 sources, demonstrating a shift in carbon dynamics. When fire emissions are factored in, the increasing Arctic–Boreal Zone sink is no longer statistically significant (budget, −319 ± 140 Tg C yr−1; trend, −9 Tg C yr−1), and the permafrost region becomes CO2 neutral (budget, −24 ± 123 Tg C yr−1; trend, −3 Tg C yr−1), underscoring the importance of fire in this region.