Permafrost regions store large quantities of organic carbon that have been stored, frozen for millennia. Rapid warming across the Arctic is destabilizing these reservoirs through permafrost thaw. Melting runoff increases hydrologic connectivity between terrestrial pools and aquatic systems. In ice-wedge tundra, thaw-driven subsidence reorganizes surface flowpaths, which creates capillary networks that transport dissolved organic carbon (DOC) from soils into streams and rivers. How reactive the DOC exported from these thaw features is, and how its lability changes as water moves downstream, remain poorly understood. This study investigated how DOC concentration and composition change when flowing from degrading ice-wedge troughs through capillary networks and into the mainstem of the Jago River on Alaska’s North Slope. Surface water and ice-wedge meltwater were collected from a range of landscape positions during the summer thaw season. Laboratory incubation experiments were used to quantify microbial DOC consumption, while the optical absorbance of dissolved organic matter was analyzed as a proxy for DOC composition along the hydrologic network. We hypothesized that ice-wedge troughs export more biologically labile DOC than downstream sites because the DOC originates from ancient frozen organic carbon sources. As water moves from thaw features through capillary networks to the Jago River mainstem, microbial processing and mixing with downstream DOC sources are expected to reduce overall lability, thereby lowering biological consumption rates. Incubation experiments revealed absorbance coefficient spectra consistently higher CDOM absorbance in ice-wedge trough and capillary network sites relative to mainstem river samples, with systematic decreases in absorbance downstream. These downstream shifts in CDOM optical properties indicated changes in dissolved organic matter composition along the flowpath. These results support that small permafrost thaw features affect how dissolved organic carbon is processed as water moves through Arctic headwaters.