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Significant progress in permafrost carbon science made over the past decades include the identification of vast permafrost carbon stocks, the development of new pan‐Arctic permafrost maps, an increase in terrestrial measurement sites for CO2 and methane fluxes, and important factors affecting carbon cycling, including vegetation changes, periods of soil freezing and thawing, wildfire, and other disturbance events. Process‐based modeling studies now include key elements of permafrost carbon cycling and advances in statistical modeling and inverse modeling enhance understanding of permafrost region C budgets. By combining existing data syntheses and model outputs, the permafrost region is likely a wetland methane source and small terrestrial ecosystem CO2 sink with lower net CO2 uptake toward higher latitudes, excluding wildfire emissions. For 2002–2014, the strongest CO2 sink was located in western Canada (median: −52 g C m−2 y−1) and smallest sinks in Alaska, Canadian tundra, and Siberian tundra (medians: −5 to −9 g C m−2 y−1). Eurasian regions had the largest median wetland methane fluxes (16–18 g CH4 m−2 y−1). Quantifying the regional scale carbon balance remains challenging because of high spatial and temporal variability and relatively low density of observations. More accurate permafrost region carbon fluxes require: (a) the development of better maps characterizing wetlands and dynamics of vegetation and disturbances, including abrupt permafrost thaw; (b) the establishment of new year‐round CO2 and methane flux sites in underrepresented areas; and (c) improved models that better represent important permafrost carbon cycle dynamics, including non‐growing season emissions and disturbance effects. Plain Language Summary: Climate change and the consequent thawing of permafrost threatens to transform the permafrost region from a carbon sink into a carbon source, posing a challenge to global climate goals. Numerous studies over the past decades have identified important factors affecting carbon cycling, including vegetation changes, periods of soil freezing and thawing, wildfire, and other disturbance events. Overall, studies show high wetland methane emissions and a small net carbon dioxide sink strength over the terrestrial permafrost region but results differ among modeling and upscaling approaches. Continued and coordinated efforts among field, modeling, and remote sensing communities are needed to integrate new knowledge from observations to modeling and predictions and finally to policy. Key Points: Rapid warming of northern permafrost region threatens ecosystems, soil carbon stocks, and global climate targetsLong‐term observations show importance of disturbance and cold season periods but are unable to detect spatiotemporal trends in C fluxCombined modeling and syntheses show the permafrost region is a small terrestrial CO2 sink with large spatial variability and net CH4 source [ABSTRACT FROM AUTHOR]