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1. Rapid environmental change occurring in high‐latitude regions has the potential to cause extensive thawing of permafrost. Retrogressive thaw slumps are a particularly spectacular form of permafrost degradation that can significantly impact lake–water chemistry; however, to date, the effects on aquatic biota have received little attention.

2. We used a diatom‐based palaeolimnological approach featuring a paired lake study design to examine the impact of thaw slumping on freshwater ecosystems in the low Arctic of western Canada. We compared biological responses in six lakes affected by permafrost degradation with six undisturbed, reference lakes.

3. Slump‐affected lakes exhibited greater biological change than the paired reference systems, although all systems have undergone ecologically significant changes over the last 200 years. Four of the six reference systems showed an increase in the relative …