Methane (CH₄) emissions from climate-sensitive ecosystems within the northern permafrost region represent a potentially large but highly uncertain source, with current estimates spanning a factor of seven (11–75 Tg CH₄ yr⁻¹). Accelerating permafrost thaw threatens significant increases in pan-Arctic CH₄ emissions, amplifying the permafrost carbon feedback. We used airborne imaging spectroscopy with meter-scale spatial resolution and broad coverage to identify a previously undiscovered CH₄ emission hotspot adjacent to a thermokarst lake in interior Alaska. Hotspot emissions were confined to <1% of the 10 ha lake study area. Ground-based chamber measurements confirmed average daily fluxes from the hotspot of 1,170 mg CH₄ m⁻² d⁻¹, with extreme daily maxima up to 24,200 mg CH₄ m⁻² d⁻¹. Ground-based geophysical measurements revealed thawed permafrost directly beneath the CH₄ hotspot, extending to a depth of ∼15 m, indicating that the intense CH₄ emissions likely originated from recently thawed permafrost. Hotspot emissions accounted for ∼40% of total diffusive CH₄ emissions from the lake study site. Combining study site findings with hotspot statistics from our 70,000 km² airborne survey across Alaska and northwestern Canada, we estimate that pan-Arctic terrestrial thermokarst hotspots currently emit 1.1 (0.1–5.2) Tg CH₄ yr⁻¹, or roughly 4% of the annual pan-Arctic wetland budget from just 0.01% of the northern permafrost land area. Our results suggest that significant proportions of pan-Arctic CH₄ emissions originate from disproportionately small areas of previously undetermined thermokarst emissions hotspots, and that pan-Arctic CH₄ emissions may increase non-linearly as thermokarst processes increase under a warming climate.