The decrease in litter decomposition rate in polluted habitats is well documented, but the factors that explain the observed variation in the magnitude of this pollution effect on litter decomposition remain poorly understood. We explored effects of environmental conditions and leaf quality on decomposition rate of mountain birch (Betula pubescens ssp. czerepanovii) leaves in a heavily polluted industrial barren near the nickel-copper smelter at Monchegorsk. Litter bags filled with leaves collected from two heavily polluted barren sites and from two control forest sites were buried at 2.5-cm depth and exposed for 2 and 4 years at each of these four sites. The relative mass loss of native leaves in the industrial barren during 2 years of exposure was reduced to 49% of the loss observed in the unpolluted forest. We found a similar reduction in mass loss when leaves from control sites were exposed to polluted sites and when leaves from polluted sites were exposed to control sites. We conclude that the reduction in leaf litter decomposition in an industrial barren is caused by pollution-induced changes in both environmental conditions and leaf quality. This reduction is much smaller than expected, given the four-fold decrease in soil microbial activity and nearly complete extinction of saprophagous invertebrates in the polluted soil. We suggest that a longer snowless period and higher spring and summer temperatures at the barren sites have partially counterbalanced the adverse effects caused by the toxicity of metal pollutants.