Microbial polyphenol metabolism plays a key role in the thawing permafrost carbon cycle. As global temperatures rise, permafrost carbon stores are vulnerable to microbial degradation. The enzyme latch theory suggests that polyphenols accumulate in saturated peatlands due to reduced phenol oxidase activity, inhibiting microbes and stabilizing carbon. However, this study challenges the theory by showing a negative relationship between phenol oxidase expression and saturation, but not other predicted trends. A gene annotation tool, CAMPER, was developed to identify polyphenol-active enzymes in microbial genomes. Applying CAMPER to genome-resolved metatranscriptomes, diverse polyphenol-active enzymes were identified across various microbial lineages under different redox conditions, shifting the paradigm that polyphenols stabilize carbon in saturated soils. The study highlights the need to consider both oxic and anoxic polyphenol metabolisms to understand carbon cycling in changing ecosystems. Permafrost stores about 50% of global soil carbon, nearly twice the amount in the atmosphere. Thawing permafrost risks destabilizing this carbon, which may be decomposed by microbes, releasing CO₂ or CH₄, greenhouse gases that accelerate climate warming. The enzyme latch theory, which posits that polyphenols inhibit microbial decomposition under anoxic conditions, has been challenged by this study. The theory assumes that oxygen-requiring phenol oxidases (POs) are the sole enzymes responsible for polyphenol degradation, but the study found that other microbial enzymes also play a role. The study also identified diverse microbial lineages involved in polyphenol metabolism, including Acidobacteriota, Proteobacteria, Actinobacteriota, and Eremiobacteriota. These lineages contribute to polyphenol transformations in different redox conditions, highlighting the complexity of microbial interactions with polyphenols. The study suggests that polyphenols may not inhibit microbial carbon metabolism but could even contribute to respiration in situ. The findings challenge the enzyme latch theory and emphasize the importance of considering polyphenol metabolisms in addition to sugars and polysaccharides when assessing peatland carbon cycles. The study also highlights the role of methanogens and methanotrophs in polyphenol transformations, suggesting that some may have resistance to polyphenols or even use them for methanogenesis. The study provides a revised view of polyphenol transformations in peatlands, emphasizing the need to consider the diverse metabolic impacts of polyphenols in ecosystem carbon cycles.Microbial polyphenol metabolism plays a key role in the thawing permafrost carbon cycle. As global temperatures rise, permafrost carbon stores are vulnerable to microbial degradation. The enzyme latch theory suggests that polyphenols accumulate in saturated peatlands due to reduced phenol oxidase activity, inhibiting microbes and stabilizing carbon. However, this study challenges the theory by showing a negative relationship between phenol oxidase expression and saturation, but not other predicted trends. A gene annotation tool, CAMPER, was developed to identify polyphenol-active enzymes in microbial genomes. Applying CAMPER to genome-resolved metatranscriptomes, diverse polyphenol-active enzymes were identified across various microbial lineages under different redox conditions, shifting the paradigm that polyphenols stabilize carbon in saturated soils. The study highlights the need to consider both oxic and anoxic polyphenol metabolisms to understand carbon cycling in changing ecosystems. Permafrost stores about 50% of global soil carbon, nearly twice the amount in the atmosphere. Thawing permafrost risks destabilizing this carbon, which may be decomposed by microbes, releasing CO₂ or CH₄, greenhouse gases that accelerate climate warming. The enzyme latch theory, which posits that polyphenols inhibit microbial decomposition under anoxic conditions, has been challenged by this study. The theory assumes that oxygen-requiring phenol oxidases (POs) are the sole enzymes responsible for polyphenol degradation, but the study found that other microbial enzymes also play a role. The study also identified diverse microbial lineages involved in polyphenol metabolism, including Acidobacteriota, Proteobacteria, Actinobacteriota, and Eremiobacteriota. These lineages contribute to polyphenol transformations in different redox conditions, highlighting the complexity of microbial interactions with polyphenols. The study suggests that polyphenols may not inhibit microbial carbon metabolism but could even contribute to respiration in situ. The findings challenge the enzyme latch theory and emphasize the importance of considering polyphenol metabolisms in addition to sugars and polysaccharides when assessing peatland carbon cycles. The study also highlights the role of methanogens and methanotrophs in polyphenol transformations, suggesting that some may have resistance to polyphenols or even use them for methanogenesis. The study provides a revised view of polyphenol transformations in peatlands, emphasizing the need to consider the diverse metabolic impacts of polyphenols in ecosystem carbon cycles.