Black spruce (Picea mariana (Mill.) B.S.P.) forest stands range from well drained to poorly drained, typically contain large amounts of soil organic carbon (SOC), and are often underlain by permafrost. To better understand the role of soil drainage class in carbon dioxide (CO2) exchange and decomposition, we measured soil respiration and net CO2 fluxes, litter decomposition and litterfall rates, and SOC stocks above permafrost in three Alaska black spruce forest stands characterized as well drained (WD), moderately drained (MD), and poorly drained (PD). Soil respiration and net CO2 fluxes were not significantly different among sites, although the relation between soil respiration rate and temperature varied with site (Q10: WD > MD > PD). Annual estimated soil respiration, litter decomposition, and groundcover photosynthesis were greatest at PD. These results suggest that soil temperature and moisture conditions in shallow organic horizon soils at PD were more favorable for decomposition compared with the better drained sites. SOC stocks, however, increase from WD to MD to PD such that surface decomposition and C storage are diametric. Greater groundcover vegetation productivity, protection of deep SOC by permafrost and anoxic conditions, and differences in fire return interval and (or) severity at PD counteract the relatively high near-surface decomposition rates, resulting in high net C accumulation. © 2010 National Research Council of Canada, NCR Research Press. Abstract reproduced by permission.