Most of the Earth's surface has now been modified by humans. In many countries, natural and semi‐natural ecosystems mostly occur as islands, isolated by land converted for agriculture and a variety of other land‐uses. In this fragmented state, long‐distance dispersal may be the only option for species to adapt their ranges in response to changing climate. The order of arrival of species may leave a lasting imprint on community assembly. Although mostly studied at and above the species level, such priority effects also apply at the intraspecific level. We suggest that this may be particularly important in subarctic and arctic ecosystems. Mountain birch (Betula pubescens ssp. tortuosa) is characterized by great intraspecific variation. We explored spatio‐temporal patterns of the first two mountain birch generations on a homogeneous, early successional glacial outwash plain in SE Iceland that was the recipient of spatially extensive long‐distance dispersal ca. 30 years ago. We evaluated the decadal progress of the young population by remeasuring in 2018, tree density and growth form, plant size, and reproductive effort on 30 transects (150 m2) established in 2008 at four sites on the plain and two adjacent sites ca. 10 km away. All measured variables showed positive increases, but contrary to our predictions of converging dynamics among sites, they had significantly diverged. Thus, two of the sites (only 500 m apart) could not be distinguished in 2008, but by 2018, one of them had much faster growth rates than the other, a higher growth form index reflecting more upright tree stature, greater reproductive effort, and much greater second‐generation seedling recruitment. We discuss two hypotheses that may explain the diverging dynamics, site‐scale environmental heterogeneity, and legacies of intraspecific priority effects.