The transfer of water and energy fluxes between the ground and the atmosphere is influenced by soil moisture (SM), which is an important factor in land surface dynamics. Accurate representation of SM over permafrost-affected regions remains challenging. Leveraging blended SM from microwave satellites, this study examines the potential for satellite SM assimilation to enhance LSM (Land Surface Model) seasonal dynamics. The Ensemble Kalman Filter (EnKF) is used to integrate SM data across the Iya River Basin, Russia. Considering the permafrost, only the summer months (June to August) are utilized for assimilation. Field data from two sites are used to validate the study’s findings. Results show that assimilation lowers the dry bias in Noah LSM by up to 6%, which is especially noticeable in the northern regions of the Iya Basin. Comparison with in situ station data demonstrates a considerable improvement in correlation between SM after assimilation (0.94) and before assimilation (0.84). The findings also reveal a significant relationship between SM and surface energy balance.