The Arctic is warming twice as fast as the global average, due in part to the albedo feedbacks of a diminishing cryosphere. As snow cover extent decreases, the underlying land is exposed, which has lower albedo and therefore absorbs more radiation, warming the surface and causing a positive feedback to climate change. Changes in terrestrial snow-free albedo (e.g. changes in vegetation or surface water) could also affect Earth's energy balance, but their importance for contemporary climate change is relatively unknown. Here we show that changes in surface water are significantly altering Artic-boreal albedo, and explain up to 27% of the spatial variation in monthly albedo change from 2000 to 2019. The increase in radiative forcing due to changes in surface water extent is most pronounced in the continuous permafrost zone, contributing to a positive feedback between permafrost thaw and climate change. Additionally, we show that fire history and changes in tree cover and surface water extent together account for at least 15% of albedo-induced radiative forcing over the study period, indicating that these processes are a regionally important aspect of the climate-albedo feedback.