The thermodynamic processes and synoptic circulation features driving lower-tropospheric temperature extremes in the high Arctic (>80°N) are investigated. Based on 10-day kinematic backward trajectories from the 5% most intense potential temperature anomalies, the contributions of horizontal and vertical transport, subsidence-induced warming, and diabatic processes to the generation of the Arctic temperature anomaly are quantified. Cold extremes are mainly the result of sustained radiative cooling due to a sheltering of the Arctic from meridional airmass exchanges. This is linked to a strengthening of the tropospheric polar vortex, a reduced frequency of high-latitude blocking, and in winter also a southward shift of the North Atlantic storm track. The temperature anomaly of 60% of wintertime extremely warm air masses (90% in summer) is due to transport from a potentially warmer region. Subsidence from the Arctic midtroposphere in blocking anticyclones is the most important warming process with the largest contribution in summer (70% of extremely warm air masses). In both seasons, poleward transport of already warm air masses contributes around 20% and is favored by a poleward shift of the North Atlantic storm track. Finally, about 40% of the air masses in winter are of an Arctic origin and experience diabatic heating by surface heat fluxes in marine cold air outbreaks. Our study emphasizes the importance of processes in the Arctic and the relevance of anomalous blocking—in winter in the Barents, Kara, and Laptev Seas and in summer in the high Arctic—for the formation of warm extremes.