High-latitude regions store substantial amounts of soil organic matter (SOM). Icelandic volcanic soils have exceptional capabilities for SOM accumulation, but recent changes in land use can significantly impact it. Water-extractable organic matter (WEOM) represents a labile SOM pool and serves as a reliable index of SOM dynamics. We assessed the stable carbon (C), stable nitrogen (N), and WEOC (water-extractable organic carbon), as well as WETN (water-extractable total nitrogen), concentrations in soils under different land uses—semi-natural habitats (tundra and wetland) and human-managed areas (intensively and extensively grazed pasturelands and formerly and presently fertilized meadows)—in southeastern Iceland. The results suggest that human-managed sites contain more total C and N but less WEOM per unit of total C or N than semi-natural habitats, except for wetlands. Wetlands exhibited the highest WEOM content. Extensive pasturelands and fertilized meadows are becoming more common in local ecosystems, highlighting the direction of changes in Icelandic grasslands management.