Permafrost soils in boreal and Arctic ecosystems store almost twice as much carbon1, 2 as is currently present in the atmosphere3. Permafrost thaw and the microbial decomposition of previously frozen organic carbon is considered one of the most likely positive climate feedbacks from terrestrial ecosystems to the atmosphere in a warmer world1, 2, 4, 5, 6, 7. The rate of carbon release from permafrost soils is highly uncertain, but it is crucial for predicting the strength and timing of this carbon-cycle feedback effect, and thus how important permafrost thaw will be for climate change this century and beyond1, 2, 4, 5, 6, 7. Sustained transfers of carbon to the atmosphere that could cause a significant positive feedback to climate change must come from old carbon, which forms the bulk of the permafrost carbon pool that accumulated over thousands of years8, 9, 10, 11. Here we measure net ecosystem carbon exchange and the radiocarbon age of ecosystem respiration in a tundra landscape undergoing permafrost thaw12 to determine the influence of old carbon loss on ecosystem carbon balance. We find that areas that thawed over the past 15 years had 40 per cent more annual losses of old carbon than minimally thawed areas, but had overall net ecosystem carbon uptake as increased plant growth offset these losses. In contrast, areas that thawed decades earlier lost even more old carbon, a 78 per cent increase over minimally thawed areas; this old carbon loss contributed to overall net ecosystem carbon release despite increased plant growth. Our data document significant losses of soil carbon with permafrost thaw that, over decadal timescales, overwhelms increased plant carbon uptake13, 14, 15 at rates that could make permafrost a large biospheric carbon source in a warmer world.