The fate of the carbon stocked in permafrost following global warming and permafrost thaw is of major concern in view of the potential for increased CH(4) and CO(2) emissions from these soils. Complex carbon compound degradation and greenhouse gas emissions are due to soil microbial communities, but no comprehensive study has yet addressed their composition and functional potential in permafrost. Here, a 2-m deep permafrost sample and its overlying active layer soil were subjected to metagenomic sequencing, quantitative PCR (qPCR) and microarray analyses. The active layer soil and the 2-m permafrost microbial community structures were very similar, with Actinobacteria being the dominant phylum. The two samples also possessed a highly similar spectrum of functional genes, especially when compared with other already published metagenomes. Key genes related to methane generation, methane oxidation and organic matter degradation were highly diverse for both samples in the metagenomic libraries and some (for example, pmoA) showed relatively high abundance in qPCR assays. Genes related to nitrogen fixation and ammonia oxidation, which could have important roles following climatic change in these nitrogen-limited environments, showed low diversity but high abundance. The 2-m permafrost showed lower abundance and diversity for all the assessed genes and taxa. Experimental biases were also evaluated using qPCR and showed that the whole-community genome amplification technique used caused representational biases in the metagenomic libraries by increasing the abundance of Bacteroidetes and decreasing the abundance of Actinobacteria. This study describes for the first time the detailed functional potential of permafrost-affected soils.