Current global change is inducing heterogeneous warming trends worldwide, with faster rates at higher latitudes in the Northern Hemisphere. Consequently, tundra vegetation is experiencing an increase in growth rate and uneven but expanding distribution. Yet, the drivers of this heterogeneity in woody species responses are still unclear. Here, applying a retrospective approach and focusing on long-term responses, we aim to get insight into growth trends and climate sensitivity of long-lived woody species belonging to different functional types with contrasting growth forms and leaf habits (shrub vs. tree and deciduous vs. evergreen). A total of 530 samples from 7 species (common juniper, dwarf birch, woolly willow, Norway spruce, lodgepole pine, rowan, and downy birch) were collected in 10 sites across Iceland. We modelled growth trends and contrasted yearly ring-width measurements, filtering in high- and low-frequency components, with precipitation, land- and sea-surface temperature records (1967–2018). Shrubs and trees showed divergent growth trends, with shrubs closely tracking the recent warming, whereas trees, especially broadleaved, showed strong fluctuations but no long-term growth trends. Secondary growth, particularly the high-frequency component, was positively correlated with summer temperatures for most of the species. On the contrary, growth responses to sea surface temperature, especially in the low frequency, were highly diverging between growth forms, with a strong positive association for shrubs and a negative for trees. Within comparable vegetation assemblage, long-lived woody species could show contrasting responses to similar climatic conditions. Given the predominant role of oceanic masses in shaping climate patterns in the Arctic and Low Arctic, further investigations are needed to deepen the knowledge on the complex interplay between coastal tundra ecosystems and land-sea surface temperature dynamics.