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Methane is the most abundant organic chemical in Earth's atmosphere, and its concentration is increasing with time, as a variety of independent measurements have shown. Photochemical reactions oxidize methane in the atmosphere; through these reactions, methane exerts strong influence over the chemistry of the troposphere and the stratosphere and many species including ozone, hydroxyl radicals, and carbon monoxide. Also, through its infrared absorption spectrum, methane is an important greenhouse gas in the climate system. We describe and enumerate key roles and reactions. Then we focus on two kinds of methane production: microbial and thermogenic. Microbial methanogenesis is described, and key organisms and substrates are identified along with their properties and habitats. Microbial methane oxidation limits the release of methane from certain methanogenic areas. Both aerobic and anaerobic oxidation are described here along with methods to measure rates of methane production and oxidation experimentally. Indicators of the origin of methane, including C and H isotopes, are reviewed. We identify and evaluate several constraints on the budget of atmospheric methane, its sources, sinks and residence time. From these constraints and other data on sources and sinks we construct a list of sources and sinks, identities, and sizes. The quasi-steady state (defined in the text) annual source (or sink) totals about 310(±60) × 1012 mol (500(±95) × 1012 g), but there are many remaining uncertainties in source and sink sizes and several types of data that could lead to stronger constraints and revised estimates in the future. It is particularly difficult to identify enough sources of radiocarbon-free methane.