Abstract The Arctic is experiencing some of the most rapid climate change on Earth, with strong impacts on tundra ecosystems that are characterized by high land-surface and vegetation heterogeneity. Previous studies have explored this complexity using satellite remote sensing, however these typically coarse spatial resolution data have generally missed sub-pixel heterogeneity, leaving critical gaps in our understanding of tundra vegetation dynamics from the community to landscape scales. To address these gaps, we collected very high-resolution (1–5 cm) optical, structural, and thermal data at three low-Arctic tundra sites on the Seward Peninsula, Alaska, using a multi-sensor unoccupied aerial system (UAS). We examined the application of these data to studying tundra vegetation dynamics, by quantifying (a) canopy height and thermoregulation (leaf–air temperature) of representative plant functional types (PFTs), (b) fine-scale patterns of vegetation composition across landscapes, and (c) impacts of fine-scale vegetation composition on landscape-scale variation of canopy height and thermoregulation. Our results show that deciduous tall shrubs (those that can potentially grow >2 m) had a strong cooling effect, with canopy temperatures significantly lower than local air temperatures and other PFTs. Increased cover of tall shrubs also had the potential to reduce the cover of low-stature PFTs across the landscape, potentially associated with their closed canopy (i.e. increased light competition) and strong thermoregulation. To understand the connections between fine-scale vegetation composition and large-scale ecosystem processes, we produced a random forest model which showed that fine-scale PFT composition accounted for 86.8% and 74.2% of the landscape-scale variation in canopy height and thermoregulation, respectively. These findings highlight the importance of spatially detailed characterization of tundra PFTs to improve our ecological understanding and model representation of tundra vegetation, also transcend our study to show the need for continued collection of similar datasets to better understand the impacts of surface heterogeneity on the mapping and modeling of tundra ecosystem dynamics, as well as assist with conservation management and biodiversity monitoring strategies.