This study used several model-based tools to analyse the dynamics of the Arctic Basin between 1997 and 2006 as a linked system of land-ocean-atmosphere C exchange. The analysis estimates that terrestrial areas of the Arctic Basin lost 62.9 Tg C yr−1 and that the Arctic Ocean gained 94.1 Tg C yr−1. Arctic lands and oceans were a net CO2 sink of 108.9 Tg C yr−1, which is within the range of uncertainty in estimates from atmospheric inversions. Although both lands and oceans of the Arctic were estimated to be CO2 sinks, the land sink diminished in strength because of increased fire disturbance compared to previous decades, while the ocean sink increased in strength because of increased biological pump activity associated with reduced sea ice cover. Terrestrial areas of the Arctic were a net source of 41.5 Tg CH4 yr−1 that increased by 0.6 Tg CH4 yr−1 during the decade of analysis, a magnitude that is comparable with an atmospheric inversion of CH4. Because the radiative forcing of the estimated CH4 emissions is much greater than the CO2 sink, the analysis suggests that the Arctic Basin is a substantial net source of green house gas forcing to the climate system.