Microphytobenthos (MPB) at higher latitudes has been poorly studied. This study used pulse‐chase 13C‐labeling to investigate the production, processing, and fate of MPB‐derived carbon (MPB‐C) in sub‐Arctic intertidal sediments over 31 d. Gross primary production (2.1 mmol C m−2 h−1 ± 0.4 mmol C m−2 h−1) was comparable to that reported for temperate regions. Some of the 13C fixed by sub‐Arctic MPB was rapidly (within 0.5 d) transferred to deeper sediments (below 2 cm), but most was retained within surface sediments (>70.2% of the 13C present at any time during the study). At any time, MPB accounted for ≥ 49.8% of this 13C. The 13C content of sediment organic carbon declined over time, but > 31% of the 13C fixed within the first tidal cycle remained after 31 d, suggesting that sub‐Arctic MPB may contribute to coastal carbon retention during the productive season. Over 21 d, 10.6% of the fixed 13C was removed via DIC fluxes and 0.3% via DOC fluxes from inundated sediment, and 0.6% as CO2 from exposed sediment. The greatest loss of 13C (38.2%) was via unmeasured pathways, including resuspension and/or removal by mobile consumers. The rates of MPB‐C production and the relative importance of the pathways for MPB‐C loss were similar to that observed for comparable lower latitude sediments, demonstrating that MPB at higher latitudes are not necessarily distinct from MPB at lower latitudes and probably play a similarly important role in ecosystem functioning. Apparently, local environmental conditions are more important than climate differences for determining the processing and fate of MPB‐C.