Fossils provide clear evidence of forests covering the Arctic and Antarctic throughout most of the past 250 million years. Ancient polar forests experienced the extreme seasonality of high latitude daylength, but flourished in a warm, temperate climate. For the past 50 years, it has been argued that deciduous trees in these ecosystems conserved carbon by avoiding the respiration required to sustain an evergreen leaf canopy during the continuous darkness of a warm winter. However, only recently have experiments been designed to test this argument by measuring the winter carbon balance of ‘living fossil’ trees in a simulated warm polar climate. Results of these experiments show clearly that the carbon cost of annually shedding leaves in deciduous trees greatly exceeds the cost of respiration for an evergreen canopy. Simulations with a mathematical model support this finding for mature forests growing across a wide latitudinal range, ending a century-long debate concerning the adaptive role of leaf habit in extinct polar forests.