P ermafrost systems in the Northern Hemisphere cover about 16% of the global soil surface area, store substantial amounts of carbon and nitrogen, and are therefore important players in the global carbon and nitrogen cycles (54, 67). Palsas are elevations of peat soil above the ground level due to uplifting of peat layers by a frozen ice lens and are mainly encountered in the discontinuous permafrost zone (63). Palsa peatlands are widely distributed in the Arctic, including Canada, Norway, Sweden, Iceland, Russia (Siberia), the United States (Alaska), and Finland (62, 75). Palsa development is affected by various environmental factors, such as wind erosion, vegetation cover, snow cover, and ground water table depth (63). High-latitude peatlands have been intensively studied with respect to their capacity to emit methane due to the large amount of stored carbon in peat soils, but nitrous oxide (N 2 O) emissions from permafrost regions were generally considered to be insignificant (12,58,66). However, recent studies document significant but variable N 2 O emissions from permafrost systems including palsas (17,45,58). N 2 O is the major ozone-depleting substance in the atmosphere (57), and such N 2 O emissions might well impact climate change since the global warming potential of N 2 O is approximately 300 times that of CO 2 (20). Palsa peats are predicted to be strongly affected by global warming (2, 21, 63). Increasing temperatures are generally anticipated to reduce the water table in northern peatlands and to increase the amount of CO 2 , CH 4 , and N 2 O released from peatland soils (2,44,45). N 2 O is produced during nitrification, denitrification, or chemical processes in soils (8,13). N 2 O is an intermediate during denitrification, and denitrification is considered to be the main source of and hypothesized to represent a sink for N 2 O in water-saturated soils including peatlands and is an essential part of the nitrogen cycle (11,13,48). Nitrate or nitrite is sequentially reduced via nitric oxide (NO) and N 2 O to dinitrogen (N 2 ) during denitrification (76). Such reductions are catalyzed by a set of oxidoreductases, namely, nitrate reductases (encoded by narG and napA), nitrite reductases (encoded by nirK and nirS), NO reductases (encoded by norBC or norZ), and N 2 O reductases (encoded by nosZ) (76,77). Nitrate reductases likewise catalyze nitrate reduction by nondenitrifying dissimilatory nitrate reducers (52). N 2 O and N 2 can be released into the atmosphere, and the ratio of N 2 O to N 2 is determined by in situ parameters such as pH, temperature, and oxygen content, as well as nitrate/nitrite and electron donor availability (69). pH is one of the main factors impacting denitrification; low pH decreases overall denitrification rates and increases the product ratio of N 2 O to N 2 (64). Although pristine northern peatlands including palsas are characterized by low pH and although evidence is accumulating that northern peatlands emit N 2 O, palsas might represent temporary sinks for N 2 O; however, mic...