Above the alpine tree line, bryophytes cover much of the tundra soil surface in dense, often monospecific carpets. Therefore, when climate warming enables tree seedling establishment above the tree line, interaction with the bryophyte layer is inevitable. Bryophytes are known to modify their environment in various ways. However, little is known about to which extent and by which mechanisms bryophytes affect the response of tree seedlings to climate warming. We aimed to assess and understand the importance of bryophyte species identity and traits for tree seedling performance at tree line temperatures and their response to warmer conditions. Seedlings of two common, tree line-forming tree species (Betula pubescens and Pinus sylvestris) were planted into intact cushions of eight common tundra bryophyte species and bryophyte-free soil and grown for 18 weeks at current (7·0 °C) and near-future (30–50 years; 9·2 °C) tree line average growing-season temperatures. Seedling performance (biomass increase and N-uptake) was measured and related to bryophyte species identity and traits indicative of their impact on the environment. Tree seedlings performed equally well or better in the presence of bryophytes than in bryophyte-free soil, which contrasts to their usually negative effects in milder climates. In addition, seedling performance and their response to higher temperatures depended on bryophyte species and seedlings of both species grew largest in the pan-boreal and subarctic bryophyte Hylocomium splendens. However, B. pubescens seedlings showed much stronger responses to higher temperatures when grown in bryophytes than in bryophyte-free soil, while the opposite was true for P. sylvestris seedlings. For B. pubescens, but not for P. sylvestris, available organic nitrogen of the bryophyte species was the trait that best predicted seedling responses to higher temperatures, likely because these seedlings had increased N-demands. Synthesis. Climatically driven changes in bryophyte species distribution may not only have knock-on effects on vascular plant establishment, but temperature effects on seedling performance are themselves moderated by bryophytes in a species-specific way. Bryophyte traits can serve as a useful tool for understanding and predicting these complex interactions.