Isotopic records across the “Latest Paleocene Thermal Maximum“ (LPTM) indicate that bottom water temperature increased by more than 4°C during a brief time interval (<104 years) of the latest Paleocene (∼55.6 Ma). There also was a coeval −2 to −3‰ excursion in the δ13C of the ocean/atmosphere inorganic carbon reservoir. Given the large mass of this reservoir, a rapid δ13C shift of this magnitude is difficult to explain within the context of conventional hypotheses for changing the mean carbon isotope composition of the ocean and atmosphere. However, a direct consequence of warming bottom water temperature from 11 to 15°C over 104 years would be a significant change in sediment thermal gradients and dissociation of oceanic CH4 hydrate at locations with intermediate water depths. In terms of the present-day oceanic CH4 hydrate reservoir, thermal dissociation of oceanic CH4 hydrate during the LPTM could have released greater than 1.1 to 2.1 × 1018 g of carbon with a δ13C of approximately −60‰. The release and subsequent oxidation of this amount of carbon is sufficient to explain a −2 to −3‰ excursion in δ13C across the LPTM. Fate of CH4 in oceanic hydrates must be considered in developing models of the climatic and paleoceanographic regimes that operated during the LPTM.