Evidence from a variety of analyses and sources confirms that the terrestrial biosphere became a larger carbon sink in the 1990's as compared to the 1980's. This recent sink can be largely attributed to the Northern extratropical areas (30oN - 90oN), roughly split between North America and Eurasia. However, there are considerable uncertainties as to the magnitude of the sink in different regions and the contribution of different mechanisms. Here we used the Terrestrial Ecosystem Model (TEM 5.0) to estimate the influence of soil thermal dynamics, including permafrost dynamics, on carbon storage in the Northern extratropics by coupling the simulation of TEM with a Model of Atmosphere Transport Chemistry (MATCH), we found that the simulated seasonal atmospheric CO2 concentrations match both the amplitude and timing of the observations at the monitoring stations of NOAA/CMDL network. We found that the TEM simulations generally captured the greening trend in the Northern extratropics as found by remote sensing data. We estimated that only 0.55 and 0.90 Pg C yr-1 were stored in Northern extratropical ecosystems during the 1980's and the early 1990's, respectively. These values are lower than comparable estimates from inverse model calculations, remote sensing and forest inventory data. In the 1980's, this storage was almost equally distributed between North America and Eurasia. However, in the early 1990's, carbon sequestration was striking different with 0.27 and 0.63 P g C yr-1 stored in North America and Eurasia, respectively. Overall, the study suggested that, in addition to the soil thermal dynamics, other mechanisms, such as nitrogen deposition, air pollution, might also be responsible for these regional differences of terrestrial carbon storage in the Northern extratropics.