Permafrost patterning in boreal peatlands contributes to landscape heterogeneity, as peat plateaus, palsas, and localized permafrost mounds are interspersed among unfrozen bogs and fens. The degradation of localized permafrost in peatlands alters local topography, hydrology, thermal regimes, and plant communities, and creates unique peatland features called "internal lawns." I used laboratory incubations to quantify carbon dioxide (CO 2) production in peat formed under different permafrost regimes (with permafrost, without permafrost, melted permafrost), and explored the relationships among proximate organic matter fractions, nutrient concentrations, and decomposition. Peat within each feature (internal lawn, bog, permafrost mound) is more chemically similar than peat collected within the same province (Alberta, Saskatchewan) or within depth intervals (surface, deep). Internal lawn peat produces more CO2 than the other peatland types. Across peatland features, acid-insoluble material (AIM) and AIM/nitrogen are significant predictors of decomposition. However, within each peatland feature, soluble proximate fractions are better predictors of CO2 production. Permafrost stability in peatlands influences plant and soil environments, which control litter inputs, organic matter quality, and decomposition rates. Spatial patterns of permafrost, as well as ecosystem processes within various permafrost features, should be considered when assessing the fate of soil carbon in northern ecosystems. ?? 2004 Springer Science+Business Media, Inc.