Patterned-ground features are common throughout arctic tundra ecosystems and develop as a result of intricate relationships among climate, hydrology, vegetation, and soil processes. Changes in the annual energy budget induced by climatic warming could likely affect the arctic freeze–thaw cycles, altering biogeochemistry and soil processes, which in turn could change the patterned-ground ecosystem. In this study, we concentrate on the hydrology of the nonsorted circle system, an example of arctic tundra patterned ground in a relatively stable condition. Our objective was to model the processes governing liquid water movement in the active layer during freezing in order to identify the driving forces that alter the balance within this system. Our model simulations demonstrate that water redistributes within the active layer during freezing as an indirect result of horizontal differences in soil temperature. Soil surface insulation (such as that imposed by vegetation or snow) causes preferential ice accumulation in adjacent noninsulated areas, which inhibits vegetation from colonizing these areas. Both lower soil freezing rates and increased vegetation on nonsorted circles reduce water movement to the center of these features, potentially altering the equilibrium condition of these systems.