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Atmospheric methane concentrations decreased during the early to middle Holocene; however, the governing mechanisms remain controversial. Although it has been suggested that the mid-Holocene minimum methane emissions are associated with hydrological change, direct evidence is lacking. Here we report a new independent approach, linking hydrological change in peat sediments from the Tibetan Plateau to changes in archaeal diether concentrations and diploptene δ13C values as tracers for methanogenesis and methanotrophy, respectively. A minimum in inferred methanogenesis occurred during the mid-Holocene, which, locally, corresponds with the driest conditions of the Holocene, reflecting a minimum in Asian monsoon precipitation. The close coupling between precipitation and methanogenesis is validated by climate simulations, which also suggest a regionally widespread impact. Importantly, the minimum in methanogenesis is associated with a maximum in methanotrophy. Therefore, methane emissions in the Tibetan Plateau region were apparently lower during the mid-Holocene and partially controlled by interactions of large-scale atmospheric circulation.