Permafrost in Arctic watersheds limits soil biological activity to a thin, seasonally thawed active layer that contributes water to streams. In many hillslopes, relatively wet drainage features called water tracks have distinct freeze-thaw patterns that affect groundwater flow and storage, and thus the export of heat and solutes to Arctic streams. This study uses groundwater flow and energy transport models to examine potential controls on the timing and duration of freeze–thaw conditions and the magnitude of temperature fluctuations within water tracks and their adjacent hillslopes. The simulated length of the active-layer thaw season varies by 1 month over the range of snow-cover and mean annual air-temperature scenarios simulated. The timing and duration of freezing is particularly sensitive to depth and duration of snow cover. Thus, the deeper snowpack covers that can accumulate in water tracks contribute to their more persistent thaw conditions and their ability to conduct groundwater downslope. A three-dimensional simulation shows that during the summer thaw season, the water track captures groundwater laterally from half way across the hillslope. The models presented here elucidate key mechanisms driving small-scale variation in the active-layer thermal regime of tundra hillslopes, which may be responsible for changes in drainage-network geometry and Arctic biogeochemical fluxes under a warming climate.