The objective of this study is to investigate the potential causes of widespread Larix sibirica Ledeb. mortality observed in the Khentii massif of northern Mongolia. The ratio of deadwood to living trees in affected stands in the Goricho region, the southernmost study site situated close to the Gobi Desert, was as high as 3.6:1. Moisture fluctuations monitored over 2 years using electrical impedance spectrometry revealed that the Goricho study site had higher soil moisture levels than the two less affected sites Barun Bayan and Dzun Bayan. High soil moisture was recorded in an area characterized by highly skeletal soils, ones with more than 35% by volume of rock fragments, and comparatively shallow soil horizons, from valley to mountains. The layer of permafrost influencing hydrogeological processes is much deeper in the Goricho region compared to the undisturbed study sites. Redundancy analysis confirmed a significant number of dead L. sibirica on sites with developed soils. Live forest stands, however damaged, grow in this region on well-drained scree slopes or on rocky bastions. The mass mortality observed for L. sibirica may be directly linked to accelerated permafrost thaw in the area bordered by the Tuul and the Terelj Rivers. Our assumption is that L. sibirica root system necrosis occurred as a result of long-term waterlogging of developed soils with high spatial heterogeneity, normally able to absorb high quantities of groundwater. The areas unaffected were scree fields and rocky bastions characterized by adequate drainage. All of our findings support the primary stages of large-scale permafrost thaw, i.e., correlating increases in soil moisture with increasing permafrost active layer thickness.