Most terrestrial carbon sequestration at mid-latitudes in the Northern Hemisphere occurs in seasonal, montane forest ecosystems1. Winter respiratory carbon dioxide losses from these ecosystems are high, and over half of the carbon assimilated by photosynthesis in the summer can be lost the following winter2,3. The amount of winter carbon dioxide loss is potentially susceptible to changes in the depth of the snowpack; a shallower snowpack has less insulation potential, causing colder soil temperatures and potentially lower soil respiration rates. Recent climate analyses have shown widespread declines in the winter snowpack of mountain ecosystems in the western USA and Europe that are coupled to positive temperature anomalies4,5,6. Here we study the effect of changes in snow cover on soil carbon cycling within the context of natural climate variation. We use a six-year record of net ecosystem carbon dioxide exchange in a subalpine forest to show that years with a reduced winter snowpack are accompanied by significantly lower rates of soil respiration. Furthermore, we show that the cause of the high sensitivity of soil respiration rate to changes in snow depth is a unique soil microbial community that exhibits exponential growth and high rates of substrate utilization at the cold temperatures that exist beneath the snow. Our observations suggest that a warmer climate may change soil carbon sequestration rates in forest ecosystems owing to changes in the depth of the insulating snow cover.