The transition from the uppermost closed tall forests to the tree species line is often called the treeline ecotone. The treeline ecotone is one of the most important climate driven ecological boundaries and a potential habitat for diverse plant species. The ecosystem structure, function and ecological process can change over short elevational gradient in this specific habitat, and thus, the treeline ecotone ecosystem is thought to be extremely vulnerable to global climate change. The tree island is characterized by clumped patches or linear strips of krummholz or trees above the continuous forest limit. The trees in the tree island can sometimes grow to a relatively large size, with similar tree height and diameter breast height to the trees in the closed forest. To reveal the ecological characteristics and formation process of the specific habitat is of great significance in predicting the treeline dynamics under future climate change scenario. Research of the treeline ecotone has mostly focused on the aboveground vegetation cover. In this paper, soil samples were collected at the treeline ecotone of the birch forest line in the north slope of Changbai Mountain, within the tree island and the open area located at the same altitude, respectively. Soil physicochemical properties and enzymatic activities were measured. Soil microbial community structure and functional genes were analyzed by shot-gun metagenomic sequencing. The results showed that the soil moisture content, total carbon, total nitrogen and microbial biomass of the tree island were significantly higher than those of the open area (P<0.05). The microbial r-strategy indicators, including cellulase activity, relative abundance of Actinobacteria, gene abundance related to transcription, defense mechanisms, cell cycle control, cell division, chromosome partitioning and simple carbon compounds degradation, were much higher in the tree island than those in the open area. On the contrary, the indicators related to the microbial K-strategy, including the relative abundance of Acidobacteria and the abundance of complex carbon compounds degradation genes, were higher in the open area. The study, for the first time, explores the microbial community structure and ecological function in a tree island ecosystem, and explains the mechanisms of tree island formation based on microbial genomic data. We proposed that the soil nutrients were enriched, and the microbial community was shifted towards r-strategy in tree island. The changes in soil nutrients and microbes would in turn regulate the tree growth and thus might enlarge the tree island area and influence the dynamics of treeline.