Permafrost is a defining characteristic of the Arctic environment. However, climate warming is thawing permafrost in many areas leading to failures in soil structure called thermokarst. An extensive survey of a 600 km2 area in and around the Toolik Lake Natural Research Area (TLNRA) revealed at least 34 thermokarst features, two thirds of which were new since ???1980 when a high resolution aerial survey of the area was done. Most of these thermokarst features were associated with headwater streams or lakes. We have measured significantly increased sediment and nutrient loading from thermokarst features to streams in two well-studied locations near the TLNRA. One small thermokarst gully that formed in 2003 on the Toolik River in a 0.9 km2 subcatchment delivered more sediment to the river than is normally delivered in 18 years from 132 km2 in the adjacent upper Kuparuk River basin (a long-term monitoring reference site). Ammonium, nitrate, and phosphate concentrations downstream from a thermokarst feature on Imnavait Creek increased significantly compared to upstream reference concentrations and the increased concentrations persisted over the period of sampling (1999-2005). The downstream concentrations were similar to those we have used in a long-term experimental manipulation of the Kuparuk River and that have significantly altered the structure and function of that river. A subsampling of other thermokarst features from the extensive regional survey showed that concentrations of ammonium, nitrate, and phosphate were always higher downstream of the thermokarst features. Our previous research has shown that even minor increases in nutrient loading stimulate primary and secondary production. However, increased sediment loading could interfere with benthic communities and change the responses to increased nutrient delivery. Although the terrestrial area impacted by thermokarsts is limited, the aquatic habitat altered by these failures can be extensive. If warming in the Arctic foothills accelerates thermokarst formation, there may be substantial and wide-spread impacts on arctic stream ecosystems that are currently poorly understood. Copyright 2008 by the American Geophysical Union.