Dataset includes soil and water samples collected from Kevo, Utsjoki region in Finland during June 2023. The aim of the study was to explore the impact of peatland and thawing palsa mire on dissolved organic matter export and processing in a small arctic catchment of Kidisjoki. The dataset consists of four parts: (1) biogeochemical variables of the sampled stream and ponds, (2) soil properties, (3) degradation experiment and (4) DNA-based metagenomic sequencing data published in ENA. Water samples were grab samples and consist of nutrient concentrations, dissolved organic carbon concentration, optical properties of dissolved organic matter (absorbance and fluorescence) and bacterial numbers. Soil environmental data consists of soil organic matter, carbon and nitrogen ratio and pH from three different depths.