We develop a permafrost classification system to describe the complex interaction of climatic and ecological processes in permafrost formation and degradation that differentiates five patterns of formation: ‘climate-driven’; ‘climate-driven, ecosystem-modified’; ‘climate-driven, ecosystem-protected’; ‘ecosystem-driven’; and ‘ecosystem-protected’ permafrost. Climate-driven permafrost develops in the continuous permafrost zone, where permafrost forms immediately after the surface is exposed to the atmosphere and even under shallow water. Climate-driven, ecosystem-modified permafrost occurs in the continuous permafrost zone when vegetation succession and organic-matter accumulation lead to development of an ice-rich layer at the top of the permafrost. During warming climates, permafrost that has formed as climate-driven can occur in the discontinuous permafrost zone, where it can persist for a long time as ecosystem-protected. Climate-driven, ecosystem protected permafrost, and its associated ground ice, cannot re-establish in the discontinuous zone once degraded, although the near surface can recover as ecosystem-driven permafrost. Ecosystem-driven permafrost forms in the discontinuous permafrost zone in poorly drained, low-lying and north-facing landscape conditions, and under strong ecosystem influence. Finally, ecosystem-protected permafrost persists as sporadic patches under warmer climates, but cannot be re-established after disturbance. These distinctions are important because the various types react differently to climate change and surface disturbances. For example, climate-driven, ecosystem-modified permafrost can experience thermokarst even under cold conditions because of its ice-rich layer formed during ecosystem development, and ecosystem-driven permafrost is unlikely to recover after disturbance, such as fire, if there is sufficient climate warming. Copyright © 2007 John Wiley & Sons, Ltd.