Arctic-alpine ecosystems are considered hot-spots of environmental change, with rapidly warming conditions causing massive alterations in vegetational structure. These changes and their environmental controls are highly complex and variable across spatial and temporal scales. Yet, despite their numerous implications for the global climate system, the underlying physiological processes and mechanisms at the individual plant scale are still little explored. Using hourly recordings of shrub stem diameter change provided by dendrometers, paired with on-site environmental conditions, enabled us to shed light on these processes. In this way, growth patterns in three widely distributed shrub species were assessed and linked to thermal and hygric conditions. We started our analysis with a close examination of one evergreen species under extreme environmental conditions, followed by a comparison of evergreen and deciduous species, and, finally, a comparative look at growth patterns across local micro-habitats. The results revealed distinct growth strategies, closely linked to species-specific water-use dynamics and cambial rhythms. Within the heterogenous alpine landscape these conditions were mainly attributed to the variation in local micro-habitats, defined by fine-scale topography and consequent variation in snow conditions and exposure. Thus, the overall growth success was mainly controlled by complex seasonal dynamics of soil moisture availability, snow conditions, and associated freeze–thaw cycles. It was therefore in many cases decoupled from governing regional climate signals. At the same time, exceedingly high summer temperatures were limiting shrub growth during the main growing season, resulting in more or less pronounced bimodal growth patterns, indicating potential growth limitation with on-going summer warming. While shrubs are currently able to maximize their growth success through a high level of adaptation to local micro-site conditions, their continued growth under rapidly changing environmental conditions is uncertain. However, our results suggest a high level of heterogeneity across spatial and temporal scales. Thus, broad-scale vegetational shifts can not be explained by a singular driver or uniform response pattern. Instead, fine-scale physiological processes and on-site near-ground environmental conditions have to be incorporated into our understanding of these changes.