Understanding the role of permafrost in controlling groundwater flow paths and fluxes is central in studies aimed at assessing potential climate change impacts on vegetation, species habitat, biogeochemical cycling, and biodiversity. Recent field studies in interior Alaska show evidence of hydrologic changes hypothesized to result from permafrost degradation. This study assesses the hydrologic control exerted by permafrost, elucidates modes of regional groundwater flow for various spatial permafrost patterns, and evaluates potential hydrologic consequences of permafrost degradation. The Yukon Flats Basin (YFB), a large (118,340 km2) subbasin within the Yukon River Basin, provides the basis for this investigation. Model simulations that represent an assumed permafrost thaw sequence reveal the following trends with decreasing permafrost coverage: (1) increased groundwater discharge to rivers, consistent with historical trends in base flow observations in the Yukon River Basin, (2) potential for increased overall groundwater flux, (3) increased spatial extent of groundwater discharge in lowlands, and (4) decreased proportion of suprapermafrost (shallow) groundwater contribution to total base flow. These trends directly affect the chemical composition and residence time of riverine exports, the state of groundwater-influenced lakes and wetlands, seasonal river-ice thickness, and stream temperatures. Presently, the YFB is coarsely mapped as spanning the continuous-discontinuous permafrost transition that model analysis shows to be a critical threshold; thus, the YFB may be on the verge of major hydrologic change should the current permafrost extent decrease. This possibility underscores the need for improved characterization of permafrost and other hydrogeologic information in the region via geophysical techniques, remote sensing, and ground-based observations.