During the Paleocene-Eocene Thermal Maximum (PETM, ∼55 Ma), marine and terrestrial carbon isotope values exhibit a negative shift of at least 2.5‰, indicative of massive destabilization of marine methane hydrates, releasing ∼2000 gigatons of methane carbon. The cause of the hydrate destabilization is unknown but has been speculated to be warming due to a change from high-latitude to low-latitude deepwater formation. Here we present results from a numerical ocean model indicating that a sudden switch of deepwater formation from southern to northern high latitudes caused middepth and deep-ocean warming of 3°–5°C. The switch is caused by a slow increase in the intensity of the atmospheric hydrologic cycle, as expected under increasing temperatures and consistent with PETM sedimentary evidence. Deepened subtropical subduction prior to the thermohaline circulation switch causes warming of 1°–4°C in limited areas at thermocline through upper intermediate depths, which could destabilize methane hydrates gradually and at progressively greater depths. Warming accompanying a south-to-north switch in deepwater formation would produce sufficient warming to destabilize seafloor gas hydrates over most of the world ocean to a water depth of at least 1900 m.