Warming-induced microbial decomposition of organic matter in permafrost soils constitutes a climate-change feedback of uncertain magnitude. While physicochemical constraints on soil functioning are relatively well understood, the constraints attributable to microbial community composition remain unclear. Here we show that biogeochemical processes in permafrost can be impaired by missing functions in the microbial community—functional limitations—probably due to environmental filtering of the microbial community over millennia-long freezing. We inoculated Yedoma permafrost with a functionally diverse exogenous microbial community to test this mechanism by introducing potentially missing microbial functions. This initiated nitrification activity and increased CO2 production by 38% over 161 days. The changes in soil functioning were strongly associated with an altered microbial community composition, rather than with changes in soil chemistry or microbial biomass. The present permafrost microbial community composition thus constrains carbon and nitrogen biogeochemical processes, but microbial colonization, likely to occur upon permafrost thaw in situ, can alleviate such functional limitations. Accounting for functional limitations and their alleviation could strongly increase our estimate of the vulnerability of permafrost soil organic matter to decomposition and the resulting global climate feedback.