There is substantial evidence that soil thermal dynamics are changing in terrestrial ecosystems of the Northern Hemisphere and that these dynamics have implications for the exchange of carbon between terrestrial ecosystems and the atmosphere. To date, large-scale biogeochemical models have been slow to incorporate the effects of soil thermal dynamics on processes that affect carbon exchange with the atmosphere. In this study we incorporated a soil thermal module (STM), appropriate to both permafrost and non-permafrost soils, into a large-scale ecosystem model, version 5.0 of the Terrestrial Ecosystem Model (TEM). We then compared observed regional and seasonal patterns of atmospheric CO2 to simulations of carbon dynamics for terrestrial ecosystems north of 30°N between TEM 5.0 and an earlier version of TEM (version 4.2) that lacked a STM. The timing of the draw-down of atmospheric CO2 at the start of the growing season and the degree of draw-down during the growing season were substantially improved by the consideration of soil thermal dynamics. Both versions of TEM indicate that climate variability and change promoted the loss of carbon from temperate ecosystems during the first half of the 20th century, and promoted carbon storage during the second half of the century. The results of the simulations by TEM suggest that land-use change in temperate latitudes (30–60°N) plays a stronger role than climate change in driving trends for increased uptake of carbon in extratropical terrestrial ecosystems (30–90°N) during recent decades. In the 1980s the TEM 5.0 simulation estimated that extratropical terrestrial ecosystems stored 0.55 Pg C yr−1, with 0.24 Pg C yr−1 in North America and 0.31 Pg C yr−1 in northern Eurasia. From 1990 through 1995 the model simulated that these ecosystems stored 0.90 Pg C yr−1, with 0.27 Pg C yr−1 stored in North America and 0.63 Pg C yr−1 stored in northern Eurasia. Thus, in comparison to the 1980s, simulated net carbon storage in the 1990s was enhanced by an additional 0.35 Pg C yr−1 in extratropical terrestrial ecosystems, with most of the additional storage in northern Eurasia. The carbon storage simulated by TEM 5.0 in the 1980s and 1990s was lower than estimates based on other methodologies, including estimates by atmospheric inversion models and remote sensing and inventory analyses. This suggests that other issues besides the role of soil thermal dynamics may be responsible, in part, for the temporal and spatial dynamics of carbon storage of extratropical terrestrial ecosystems. In conclusion, the consideration of soil thermal dynamics and terrestrial cryospheric processes in modeling the global carbon cycle has helped to reduce biases in the simulation of the seasonality of carbon dynamics of extratropical terrestrial ecosystems. This progress should lead to an enhanced ability to clarify the role of other issues that influence carbon dynamics in terrestrial regions that experience seasonal freezing and thawing of soil.