Microtopographic features, such as polygonal ground, are characteristic sources of landscape heterogeneity in the Alaskan Arctic coastal plain. Here, we analyze the effects of snow redistribution (SR) and lateral subsurface processes on hydrologic and thermal states at a polygonal tundra site near Barrow, Alaska. We extended the land model integrated in the E3SM to redistribute incoming snow by accounting for microtopography and incorporated subsurface lateral transport of water and energy (ELM-3D v1.0). Multiple 10-year-long simulations were performed for a transect across a polygonal tundra landscape at the Barrow Environmental Observatory in Alaska to isolate the impact of SR and subsurface process representation. When SR was included, model predictions better agreed (higher R2, lower bias and RMSE) with observed differences in snow depth between polygonal rims and centers. The model was also able to accurately reproduce observed soil temperature vertical profiles in the polygon rims and centers (overall bias, RMSE, and R2 of 0.59 °C, 1.82 °C, and 0.99, respectively). The spatial heterogeneity of snow depth during the winter due to SR generated surface soil temperature heterogeneity that propagated in depth and time and led to ∼ 10 cm shallower and  ∼ 5 cm deeper maximum annual thaw depths under the polygon rims and centers, respectively. Additionally, SR led to spatial heterogeneity in surface energy fluxes and soil moisture during the summer. Excluding lateral subsurface hydrologic and thermal processes led to small effects on mean states but an overestimation of spatial variability in soil moisture and soil temperature as subsurface liquid pressure and thermal gradients were artificially prevented from spatially dissipating over time. The effect of lateral subsurface processes on maximum thaw depths was modest, with mean absolute differences of ∼ 3 cm. Our integration of three-dimensional subsurface hydrologic and thermal subsurface dynamics in the E3SM land model will facilitate a wide range of analyses heretofore impossible in an ESM context.