Top melting of ice-wedges and subsequent ground subsidence is now a widespread phenomenon across the Arctic domain. We show field and remote sensing observations that document extensive ice-wedge degradation, which initially has resulted in increased wetness contrast across the landscape (i.e. both a drying and a wetting), a shift in pond type and an overall drying in later stages. The differential ground subsidence at cold continuous permafrost regions appear to be linked to press and pulse climate forcing. Here, the process of crossing the local threshold for ice-wedge stability may be favored by a press occurrence such as long-term, gradual increases in summer air temperature, mean annual air temperature and/or possibly winter precipitation, but our observations suggest it is most likely initiated by pulse atmospheric forcing such as extreme summer warmth and/or winter precipitation. Field measurements of water levels, frost tables and snow accumulation across the main ice-wedge polygon types and their respective features support dramatic shifts in the hydrologic regime with altered topography and a complexity that ultimately affect the larger-scale hydrologic system. For example, our numerical model experiments show that a connected trough-network reduces inundation and increases runoff and that changing patterns of snow distribution due to the differential ground subsidence play a crucial role in altering lowland tundra water balance. These fine-scale (10’s cm) geomorphic changes are expected to further expand and amplify in rapidly warming permafrost regions and likely will dramatically modify land-atmosphere and land-ocean fluxes and exchange of carbon, water, and energy.