Shallowing of the Panama Sill and the closure of the Central American Seaway initiated the modern Loop Current–Gulf Stream circulation pattern during the Miocene, but no direct evidence has yet been provided for effective heat transport to the northern North Atlantic during that time. Climatic signals from 11 precisely dated plant-bearing sedimentary rock formations in Iceland, spanning 15–0.8 million years (Myr), resolve the impacts of the developing Miocene global thermohaline circulation on terrestrial vegetation in the subarctic North Atlantic region. "Köppen signatures" were implemented to express climatic properties of fossil plant taxa and their potential modern analogues using the principal concept of the generic Köppen–Geiger climate system, which is based on plant distribution patterns. Using Köppen signatures and the correlation between Köppen climate zones and major global vegetation zones, fossil assemblages were used to trace major vegetation shifts. This evidence was combined with evidence from tectonics and palaeoceanography. In contrast to the global climatic trend, the vegetation record reveals no cooling between ~ 15 and 12 Myr, whereas periods of climatic deterioration between 12 and 10 Myr, 8 and 4 Myr, and in the Pleistocene are in phase with increased pulses of ice-rafted debris in the Northern Hemisphere. The observed sequence of climate change in the northern North Atlantic can most likely be explained by an effective Gulf Stream-mediated heat transport from the middle Miocene onwards.