Permafrost thaw in the Arctic driven by climate change is mobilizing ancient terrigenous organic carbon (OC) into fluvial networks. Understanding the controls on metabolism of this OC is imperative for assessing its role with respect to climate feedbacks. In this study, we examined the effect of inorganic nutrient supply and dissolved organic matter (DOM) composition on aquatic extracellular enzyme activities (EEAs) in waters draining the Kolyma River Basin (Siberia), including permafrost-derived OC. Reducing the phenolic content of the DOM pool resulted in dramatic increases in hydrolase EEAs (e.g., phosphatase activity increased >28-fold) supporting the idea that high concentrations of polyphenolic compounds in DOM (e.g., plant structural tissues) inhibit enzyme synthesis or activity, limiting OC degradation. EEAs were significantly more responsive to inorganic nutrient additions only after phenolic inhibition was experimentally removed. In controlled mixtures of modern OC and thawed permafrost endmember OC sources, respiration rates per unit dissolved OC were 1.3–1.6 times higher in waters containing ancient carbon, suggesting that permafrost-derived OC was more available for microbial mineralization. In addition, waters containing ancient permafrost-derived OC supported elevated phosphatase and glucosidase activities. Based on these combined results, we propose that both composition and nutrient availability regulate DOM metabolism in Arctic aquatic ecosystems. Our empirical findings are incorporated into a mechanistic conceptual model highlighting two key enzymatic processes in the mineralization of riverine OM: (i) the role of phenol oxidase activity in reducing inhibitory phenolic compounds and (ii) the role of phosphatase in mobilizing organic P. Permafrost-derived DOM degradation was less constrained by this initial ‘phenolic-OM’ inhibition; thus, informing reports of high biological availability of ancient, permafrost-derived DOM with clear ramifications for its metabolism in fluvial networks and feedbacks to climate.