Abstract: With climate warming, shrubs have been observed to grow on Arctic tundra. Their presence is known to increase snow height and is expected to increase the thermal insulating effect of the snowpack. An important consequence would be the warming of the ground, which will accelerate permafrost thaw, providing an important positive feedback to warming. At Bylot Island (73° N, 80° W) in the Canadian high Arctic where bushes of willows (Salix richardsonii Hook) are growing, we have observed the snow stratigraphy and measured the vertical profiles of snow density, thermal conductivity and specific surface area (SSA) in over 20 sites of high Arctic tundra and in willow bushes 20 to 40 cm high. We find that shrubs increase snow height, but only up to their own height. In shrubs, snow density, thermal conductivity and SSA are all significantly lower than on herb tundra. In shrubs, depth hoar which has a low thermal conductivity was observed to grow up to shrub height, while on herb tundra, depth hoar only developed to 5 to 10 cm high. The thermal resistance of the snowpack was in general higher in shrubs than on herb tundra. More signs of melting were observed in shrubs, presumably because stems absorb radiation and provide hotspots that initiate melting. When melting was extensive, thermal conductivity was increased and thermal resistance was reduced, counteracting the observed effect of shrubs in the absence of melting. Simulations of the effect of shrubs on snow properties and on the ground thermal regime were made with the Crocus snow physics model and the ISBA (Interactions between Soil–Biosphere–Atmosphere) land surface scheme, driven by in situ and reanalysis meteorological data. These simulations did not take into account the summer impact of shrubs. They predict that the ground at 5 cm depth at Bylot Island during the 2014–2015 winter would be up to 13 °C warmer in the presence of shrubs. Such warming may however be mitigated by summer effects.