Arctic soil microbial communities may shift with increasing temperatures and water availability from climate change. We examined temperature and volumetric liquid water content (VWC) in the upper 80 cm of permafrost-affected soil over 2 years (2018–2019) at the Bayelva monitoring station, Ny Ålesund, Svalbard. We show VWC increases with depth, whereas in situ temperature is more stable vertically, ranging from −5°C to 5 °C seasonally. Prokaryotic metagenome-assembled genomes (MAGs) were obtained at 2–4 cm vertical resolution collected while frozen in April 2018 and at 10 cm vertical resolution collected while thawed in September 2019. The most abundant MAGs were Acidobacteriota, Actinomycetota, and Chloroflexota. Actinomycetota and Chloroflexota increase with depth, while Acidobacteriota classes Thermoanaerobaculia Gp7-AA8, Blastocatellia UBA7656, and Vicinamibacteria Vicinamibacterales are found above 6 cm, below 6 cm, and below 20 cm, respectively. All MAGs have diverse carbon-degrading genes, and Actinomycetota and Chloroflexota have autotrophic genes. Genes encoding β -glucosidase, N-acetyl-β-D-glucosaminidase, and xylosidase increase with depth, indicating a greater potential for organic matter degradation with higher VWC. Acidobacteriota dominate the top 6 cm with their classes segregating by depth, whereas Actinomycetota and Chloroflexota dominate below ∼6 cm. This suggests that Acidobacteriota classes adapt to lower VWC at the surface, while Actinomycetota and Chloroflexota persist below 6 cm with higher VWC. This indicates that VWC may be as important as temperature in microbial climate change responses in Arctic mineral soils. Here we describe MAG-based Seqcode type species in the Acidobacteriota, Onstottus arcticum, Onstottus frigus, and Gilichinskyi gelida and in the Actinobacteriota, Mayfieldus profundus.