Subsidence of organic soils in the Sacramento-San Joaquin Delta, California, has increased the potential for levee failure and flooding in the region. Because oxidation of the peat soils is a primary cause of subsidence, reversion of affected lands to wetlands has been proposed as a mitigation tool. To test this hypothesis, three 10 x 10 meter enclosures were built on Twitchell Island in the Delta and managed as different wetland habitats. Emissions of carbon dioxide and methane were measured in situ from October 1995 through December 1997, from the systems that developed under the different water-management treatments. Treatments included a seasonal control (SC) under current island management conditions; reverse flooding (RF), where the land is intentionally flooded from early dry season until midsummer; permanent shallow flooding (F); and a more deeply flooded, open-water (OW) treatment. Hydrologic treatments affected microbial processes, plant community and temperature dynamics which, in turn, affected carbon cycling. Water-management treatments with a period of flooding significantly decreased gaseous carbon emissions compared to the seasonal control. Permanent flooding treatments showed significantly higher methane fluxes than treatments with some period of aerobic conditions. Shallow flooding treatments created conditions that support cattail [Typha species (spp.)] marshes, while deep flooding precluded emergent vegetation. Carbon inputs to the permanent shallow flooding treatment tended to be greater than the measured losses. This suggests that permanent shallow flooding has the greatest potential for managing subsidence of these soils by generating organic substrate more rapidly than is lost through decomposition. Carbon input estimates of plant biomass compared to measurements of gaseous carbon losses indicate the potential for mitigation of subsidence through hydrologic management of the organic soils in the area.