Planococcus halocryophilus strain Or1, isolated from high Arctic permafrost, grows and divides at -15 °C, the lowest temperature demonstrated to date, and is metabolically active at -25 °C in frozen permafrost microcosms. To understand how P. halocryophilus Or1 remains active under the subzero and osmotically dynamic conditions that characterize its native permafrost habitat, we investigated the genome, cell physiology and transcriptomes of growth at -15 °C and 18% NaCl compared with optimal (25 °C) temperatures. Subzero growth coincides with unusual cell envelope features of encrustations surrounding cells, while the cytoplasmic membrane is significantly remodeled favouring a higher ratio of saturated to branched fatty acids. Analyses of the 3.4 Mbp genome revealed that a suite of cold and osmotic-specific adaptive mechanisms are present as well as an amino acid distribution favouring increased flexibility of proteins. Genomic redundancy within 17% of the genome could enable P. halocryophilus Or1 to exploit isozyme exchange to maintain growth under stress, including multiple copies of osmolyte uptake genes (Opu and Pro genes). Isozyme exchange was observed between the transcriptome data sets, with selective upregulation of multi-copy genes involved in cell division, fatty acid synthesis, solute binding, oxidative stress response and transcriptional regulation. The combination of protein flexibility, resource efficiency, genomic plasticity and synergistic adaptation likely compensate against osmotic and cold stresses. These results suggest that non-spore forming P. halocryophilus Or1 is specifically suited for active growth in its Arctic permafrost habitat (ambient temp. ∼-16 °C), indicating that such cryoenvironments harbor a more active microbial ecosystem than previously thought.