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Arctic hotspots, local areas of high biodiversity, are potential key sites for conservation of Arctic biodiversity. However, there is a need for improved understanding of their long-term resilience. The Arctic hotspot of Ringhorndalen has the highest registered diversity of vascular plants in the Svalbard archipelago, including several remarkable and isolated plant populations located far north of their normal distribution range. Here we analyze a lake sediment core from Ringhorndalen for sedimentary ancient DNA (sedaDNA) and geochemical proxies to detect changes in local vegetation and climate. Half of the plant taxa appeared already before 10,600 cal. yr BP, indicating rapid colonization as the ice retreated. Thermophilous species had a reoccurring presence throughout the Holocene record, but stronger signal in the early than Late Holocene period. Thus, thermophilous Arctic plant species had broader distribution ranges during the Early Holocene thermal maximum c. 10,000 cal. yr BP than today. Most of these thermophilous species are currently not recorded in the catchment area of the studied lake, but occur locally in favourable areas further into the valley. For example, Empetrum nigrum was found in >40% of the sedaDNA samples, whereas its current distribution in Ringhorndalen is highly restricted and outside the catchment area of the lake. Our findings support the hypothesis of isolated relict populations in Ringhorndalen. The findings are also consistent with main Holocene climatic shifts in Svalbard identified by previous studies and indicate an early warm and species-rich postglacial period until c. 6500 cal. yr BP, followed by fluctuating cool and warm periods throughout the later Holocene.