Climate change in high latitudes can lead to permafrost thaw, which in ice-rich soils can result in ground subsidence, or thermokarst. In interior Alaska, we examined seasonal and annual ecosystem CO2 exchange using static and automatic chamber measurements in three areas of a moist acidic tundra ecosystem undergoing varying degrees of permafrost thaw and thermokarst development. One site had extensive thermokarst features, and historic aerial photography indicated it was present at least 50 years prior to this study. A second site had a moderate number of thermokarst features that were known to have developed concurrently with permafrost warming that occurred 15 years prior to this study. A third site had a minimal amount of thermokarst development. The areal extent of thermokarst features reflected the seasonal thaw depth. The “extensive” site had the deepest seasonal thaw depth, and the “moderate” site had thaw depths slightly, but not significantly deeper than the site with “minimal” thermokarst development. Greater permafrost thaw corresponded to significantly greater gross primary productivity (GPP) at the moderate and extensive thaw sites as compared to the minimal thaw site. However, greater ecosystem respiration (Reco) during the spring, fall, and winter resulted in the extensive thaw site being a significant net source of CO2 to the atmosphere over 3 years, while the moderate thaw site was a CO2 sink. The minimal thaw site was near CO2 neutral and not significantly different from the extensive thaw site. Thus after permafrost thaw, initial periods of increased GPP and net CO2 uptake could be offset by elevated Reco during the winter, spring, and fall.