Predicted climate warming and permafrost thaw in northeastern Siberia is expected to alter hydrologic flow paths, changing the quantity and quality of organic matter (OM) supplied to streams. With deeper flow paths, higher contributions of OM sourced from permafrost soils may be exported. This material can be relatively biolabile and has been shown to stimulate microbial production of enzymes crucial for the degradation of carbon in stream waters. Permafrost derived OM that has a different composition than active layer OM may generate hot-spots for microbial activity, and CO2 and CH4 emissions in areas entering stream benthic sediments; however, our understanding of how OM composition influences enzyme activities, and how this affects carbon degradation in these areas remains rudimentary. Here we show that ancient OM residing in Yedoma permafrost (ice rich deposits formed during the late Pleistocene) and modern OM found in a typical Arctic watershed differ in their composition and biolability. Furthermore, we demonstrate that microbes within stream sediments receiving different OM sources (ancient/ modern) express different specific enzymes, which is likely affecting OM reactivity and is consistent with a shift in nutrient and organic carbon availability. We also show that differences in stream sediment type from a tussock grass dominated wetland and a stagnant pool in the stream channel may also affect enzyme activity rates. A better understanding of the impact of terrestrial carbon inputs on OM degradation in stream sediments will improve our understanding of potential feedbacks between permafrost and climate change.