Current land surface models, including the E3SM Land Model v1 (ELMv1), are inadequate to capture landscape heterogeneity due to microtopographic features in the Alaskan Arctic costal plan. We extended the ELM to redistribute incoming snow by accounting for microtopography and incorporated subsurface lateral transport of water and energy. The spatial heterogeneity of snow depth during the winter due to snow redistribution generated surface soil temperature heterogeneity that propagated in depth and time. Excluding lateral subsurface hydrologic and thermal processes led 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. This work also demonstrates an important 3D modeling capability integrated in the global-scale land model ELMv1.