Permafrost thaw can affect decomposition rates by changing environmental conditions and litter quality. As permafrost thaws, soils warm and thermokarst (ground subsidence) features form, causing some areas to become wetter while other areas become drier. We used a common substrate to measure how permafrost thaw affects decomposition rates in the surface soil in a natural permafrost thaw gradient and a warming experiment in Healy, Alaska. Permafrost thaw also changes plant community composition. We decomposed 12 plant litters in a common garden to test how changing plant litter inputs would affect decomposition. We combined species’ tissue-specific decomposition rates with species and tissue-level estimates of aboveground net primary productivity to calculate community-weighted decomposition constants at both the thaw gradient and warming experiment. Moisture, specifically growing season precipitation and water table depth, was the most significant driver of decomposition. At the gradient, an increase in growing season precipitation from 200 to 300 mm increased mass loss of the common substrate by 100%. At the warming experiment, a decrease in the depth to the water table from 30 to 15 cm increased mass loss by 100%. At the gradient, community-weighted decomposition was 21% faster in extensive than in minimal thaw, but was similar when moss production was included. Overall, the effect of climate change and permafrost thaw on surface soil decomposition are driven more by precipitation and soil environment than by changes to plant communities. Increasing soil moisture is thereby another mechanism by which permafrost thaw can become a positive feedback to climate change.