The freshwater fern Azolla blooms in the late early Eocene Arctic Ocean, under high pCO2, low salinity, and nutrient-rich conditions, played a critical role in global carbon sequestration and climate cooling. Despite some studies on its proliferation, the mechanisms behind its abrupt extinction remain unresolved. This study reconstructs paleoenvironmental conditions during and after the Azolla phase using sediment cores from Integrated Ocean Drilling Program (IODP) Expedition 302, on the basis of multiple geochemical proxies. Both boron/gallium (B/Ga) and strontium/barium (Sr/Ba) ratios indicate no significant changes in salinity during both the Azolla bloom and collapse phase, suggesting that salinity may not have been the primary driver. Elevated aluminum content and chemical index of alteration (CIA) values during the Azolla phase reflect intensified chemical weathering and terrestrial nutrient influx, sustaining high primary productivity. High molybdenum enrichment (MoEF) supports euxinic bottom-water conditions that enhanced phosphorus (P) release, establishing a positive productivity feedback, as shown by inverse P/Al ratios and TOC content. Previous studies have linked the termination of Azolla to obliquity-modulated aridification, which reduced precipitation and weathering, curtailing the riverine nutrient supply. A shift from euxinic to ferruginous bottom water conditions promoted sedimentary phosphorus burial, as shown by rising P/Al ratios, and suppressed nutrient recycling. These processes may have led to phosphorus limitation, triggering Azolla collapse. Given its significant contribution to organic carbon burial, the demise of Azolla likely perturbed the Arctic carbon sink and atmospheric CO2, underscoring the sensitivity of high-latitude ecosystems to climate-driven nutrient availability. This study provides new insights into the sensitivity of high-latitude ecosystems under warming climates.