Carbon dioxide, energy flux measurements and methane chamber measurements were carried out in an arctic wet tussock grassland located on a flood plane of the Kolyma river in NE Siberia over a summer period of 155 days in 2002 and early 2003. Respiration was also measured in April 2004. The study region is characterized by late thaw of the top soil (mid of June) and periodic spring floods. A stagnant water table below the grass canopy is fed by thawing of the active layer of permafrost and by flood water. The climate is continental with average daily temperature in the warmest months of 13°C (maximum temperature at midday: 28°C by the end of July), dry air (maximum vapour pressure deficit at midday: 28 hPa) and low rainfall of 50 mm during summer (July–September). Summer evaporation (July–September: 103 mm) exceeded rainfall by a factor of 2. The daily average Bowen ratio (H/LE) was 0.62 during the growing season. Net ecosystem CO2 uptake reached 10 μmol m−2 s−1 and was related to photon flux density (PFD) and vapour pressure deficit (VPD). The cumulative annual net carbon flux from the atmosphere to the terrestrial surface was estimated to be about −38 g C m−2 yr−1 (negative flux depicts net carbon sink). Winter respiration was extrapolated using the Lloyd and Taylor function. The net carbon balance is composed of a high rate of assimilation in a short summer and a fairly large but uncertain respiration mainly during autumn and spring. Methane flux (about 12 g C m−2 measured over 60 days) was 25% of C uptake during the same period of time (end of July to end of September). Assuming that CH4 was emitted only in summer, and taking the greenhouse gas warming potential of CH4 vs. CO2 into account (factor 23), the study site was a greenhouse gas source (at least 200 g Cequivalent m−2 yr−1). Comparing different studies in wetlands and tundra ecosystems as related to latitude, we expect that global warming would rather increase than decrease the CO2-C sink.