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Ancient greenhouse periods are useful analogs for predicting effects of anthropogenic climate change on regional and global temperature and precipitation patterns. A paucity of terrestrial data from polar regions during warm episodes challenges our understanding of polar climate responses to natural/anthropogenic change and therefore our ability to predict future changes in precipitation. Ellesmere and Axel Heiberg Islands in the Canadian Arctic preserve terrestrial deposits spanning the late Paleocene to middle Eocene (59–45 Ma). Here we expand on existing regional sedimentology and paleontology through the addition of stable (δ13C, δ18O) and clumped (Δ47) isotope analyses on palustrine carbonates. δ13C isotope values range from −4.6 to +12.3‰ (VPDB), and δ18O isotope values range from −23.1 to −15.2‰ (VPDB). Both carbon and oxygen isotope averages decrease with increasing diagenetic alteration. Unusually enriched carbon isotope (δ13C) values suggest that analyzed carbonates experienced repeated dissolution‐precipitation enrichment cycles, potentially caused by seasonal fluctuations in water availability resulting in summer carbonate dissolution followed by winter carbonate re‐precipitation. Stable isotopes suggest some degree of precipitation seasonality or reduction in winter water availability in the Canadian Arctic during the Paleogene. Clumped (Δ47) temperature estimates range from 52 to 121°C and indicate low temperature solid‐state reordering of micritic samples and diagenetic recrystallization in sparry samples. Average temperatures agree with vitrinite reflectance data for Eureka Sound Group and underlying sediments, highlighting structural complexity across the region. Broadly, combined stable and clumped isotope data from carbonates in complex systems are effective for describing both paleoclimatic and post‐burial conditions. Plain Language Summary: Paleogene paleohydrology in Arctic Canada has been a question of much debate in recent years, with competing ideas about conditions characterized as either "polar monsoon" or "ever‐wet" regimes. Proxy records from Ellesmere and Axel Heiberg islands have been central to this debate, but complex stratigraphy and burial histories have hampered a resolution. Here we employ a combined carbonate isotope (δ13C, δ18O, Δ47) approach to disentangle paleoclimate and diagenetic signals. Using palustrine carbonates (which host previously evaluated paleobotanical remains) within a new stratigraphic framework, we demonstrate that δ13C and δ18O values from primary‐fabric samples indicate a distinct, but non‐monsoonal hydrologic seasonality during the late Paleocene/early Eocene. We also demonstrate that Δ47 temperatures reflect both shallow burial reordering and more intense remineralization, which are consistent with vitrinite reflectance studies showing variable deformation and geothermal gradients in the Sverdrup Basin. This combined isotopic approach is novel in the region, and can be applied to other regions of interest in deep time. Key Points: Combined carbonate isotope approach disentangles paleoclimate/diagenesis despite complex environmental histories on Ellesmere/Axel HeibergCarbon and oxygen isotope values highlight hydrologic seasonality in the Arctic during the PaleogeneTemperatures from carbonate clumped isotopes are consistent with vitrinite reflectance burial temperature, suggesting variable deformation [ABSTRACT FROM AUTHOR]