Warming and hydrological changes have already affected and shifted environments in the Arctic. Arctic wetlands are complex systems of coupled hydrological, ecological, and permafrost-related processes, vulnerable to such environmental changes. This review uses a systems perspective approach to synthesize and elucidate the various interlinked responses and feedbacks of Arctic wetlands to hydroclimatic changes. Starting from increased air temperatures, subsequent permafrost thaw and concurrent hydrological changes are identified as key factors for both shrinkage and expansion of wetland area. Other diverse factors further interact with warming, hydrological changes, and permafrost thaw in altering the Arctic wetland systems. Surface albedo shifts driven by land cover alterations are powerful in reinforcing Arctic warming, while vegetation-related factors can balance and decelerate permafrost thaw, causing negative feedback loops. With the vast amounts of carbon stored in Arctic wetlands, their changes in turn affect the global carbon cycle. Overall, the systems perspectives outlined and highlighted in this review can be useful in structuring and elucidating the interactions of wetlands with climate, hydrological, and other environmental changes in the Arctic, including the essential permafrost-carbon feedback.