Changes in species’ distributions are classically projected based on their climate envelopes. For Siberian forests, which have a tremendous significance for vegetation-climate feedbacks, this implies future shifts of each of the forest-forming larch (Larix) species to the north-east. However, in addition to abiotic factors, reliable projections must assess the role of historical biogeography and biotic interactions. Here, we use sedimentary ancient DNA and individual-based modelling to investigate the distribution of larch species and mitochondrial haplotypes through space and time across the treeline ecotone on the southern Taymyr peninsula, which at the same time presents a boundary area of two larch species. We find spatial and temporal patterns, which suggest that forest density is the most influential driver determining the precise distribution of species and mitochondrial haplotypes. This suggests a strong influence of competition on the species’ range shifts. These findings imply possible climate change outcomes that are directly opposed to projections based purely on climate envelopes. Investigations of such fine-scale processes of biodiversity change through time are possible using paleoenvironmental DNA, which is available much more readily than visible fossils and can provide information at a level of resolution that is not reached in classical palaeoecology.