Question: Current climate changes in the Alaskan Arctic, which are characterized by increases in temperature and length of growing season, could alter vegetation structure, especially through increases in shrub cover or the movement of treeline. These changes in vegetation structure have consequences for the climate system. What is the relationship between structural complexity and partitioning of surface energy along a gradient from tundra through shrub tundra to closed canopy forest? Location: Arctic tundra-boreal forest transition in the Alaskan Arctic. Methods: Along this gradient of increasing canopy complexity, we measured key vegetation characteristics, including community composition, biomass, cover, height, leaf area index and stem area index. We relate these vegetation characteristics to albedo and the partitioning of net radiation into ground, latent, and sensible heating fluxes. Results: Canopy complexity increased along the sequence from tundra to forest due to the addition of new plant functional types. This led to non-linear changes in biomass, cover, and height in the understory. The increased canopy complexity resulted in reduced ground heat fluxes, relatively conserved latent heat fluxes and increased sensible heat fluxes. The localized warming associated with increased sensible heating over more complex canopies may amplify regional warming, causing further vegetation change in the Alaskan Arctic.