We measured CO2 and CH4 exchange from the center of a Sphagnum-dominated permafrost collapse, through an aquatic moat, and into a recently burned black spruce forest on the Tanana River floodplain in interior Alaska. In the anomalously dry growing season of 2004, both the collapse and the surrounding burned area were net sinks for CO2, with a mean daytime net ecosystem exchange of -1.4 mmol CO2 m-2 s-1, while the moat was a CH4 source with a mean flux of 0.013 mmol CH4 m-2 s-1. Regression analyses identified temperature as the dominant factor affecting intragrowing season variation in CO2 exchange and soil moisture as the primary control influencing CH4 emissions. CH4 emissions during the wettest portion of the growing season were four times higher than during the driest periods. If temperatures continue to warm, peatland vegetation will likely expand with permafrost degradation, resulting in greater carbon accumulation and methane emissions for the landscape as a whole. © 2007 by the American Geophysical Union.