Thermokarst terrain develops when some forms of permafrost – or so-called frozen ground – thaw and the soil subsides under its own mass. The processes that create thermokarst terrain alter the Arctic landscape substantially. The formation of thermokarst terrain is a natural phenomenon that increases or decreases as the climate warms or cools. There is now strong evidence that permafrost has been warming for several decades and that the rate of thermokarst formation has accelerated in many parts of the Arctic. Based on predictions of future climate in Arctic regions, a substantial portion of the permafrost that exists today will disappear in the next 50–100 years. The increase in thermokarst activity observed recently is likely to be an early indicator of permafrost retreat. Taken individually a particular thermokarst feature is perhaps merely an interesting oddity. However, taking a longer temporal and larger spatial perspective, it is reasonable to conclude that thermokarst formation has important impacts on the hydrology, geomorphology, biogeochemistry and ecology of the Arctic landscape. If the rate of thermokarst formation increases as expected, then it is possible that important aspects of the structure and function of the Arctic landscape will change rapidly as well. It is of particular concern that permafrost contains more total carbon than is currently in circulation in the modern atmosphere. New experimental evidence suggests that when permafrost thaws, the carbon it contains will become available for microbial processing and much of the carbon may end up as carbon dioxide or methane in the atmosphere. It is important that we understand these interacting process to better understand how climate change will affect the Arctic environment as well as the global climate, in the future.