Between woody krummholz and graminoid tundra of the Giant Mts., a boundary has developed in the form of 0.5 m wide edge, dividing the canopy-sheltered and frost-affected tundra ecosystems. The analysis of vegetation diversity was performed across the edge of north-facing sides of krummholz shrubs, with regard to krummholz growth types (tall, table) and substrate (mineral/granite, organic/bog). Aboveground biomass and light availability were sampled along twelve minitransects, which included (1) centre of Pinus mugo shrubs, (2) inner krummholz edge inward the vertical projection of canopy, (3) outer edge outside the vertical canopy projection, and (4) open grassland of the Nardo-Caricion or Oxycocco-Empetrion hermaphroditi. Krummholz shrubs cause a decrease in vegetation diversity and alteration of species composition; in the centres and at the inner edge, broadleaved shade-tolerant clonal forbs of the montane taiga zone were abundant, namely Homogyne alpina, Trientalis europea, Galium saxatile, Vaccinium myrtillus and lichens. From the viewpoint of variability in the arctic-alpine tundra, a decreasing role of frost-affected processes is important at the outer edge. These sites are marked by increased biomass production and by occurrence of mobile clonal graminoids Deschampsia flexuosa and Eriophorum vaginatum, replacing Nardus stricta and Trichophorum caespitosum, the tussocky dominants of the open tundra grassland. As suggested by RDA ordination, this response is less related to light availability than to other, so far unknown, factors.