Thermokarst lakes and peat-accumulating drained lake basins cover a substantial portion of Arctic lowland landscapes, yet the role of thermokarst lake drainage and ensuing peat formation in landscape-scale carbon (C) budgets remains understudied. Here we use measurements of terrestrial peat thickness, bulk density, organic matter content, and basal radiocarbon age from permafrost cores, soil pits, and exposures in vegetated, drained lake basins to characterize regional lake drainage chronology, C accumulation rates, and the role of thermokarst-lake cycling in carbon dynamics throughout the Holocene on the northern Seward Peninsula, Alaska. Most detectable lake drainage events occurred within the last 4,000 years with the highest drainage frequency during the medieval climate anomaly. Peat accumulation rates were highest in young (50–500 years) drained lake basins (35.2 g C m−2 yr−1) and decreased exponentially with time since drainage to 9 g C m−2 yr−1 in the oldest basins. Spatial analyses of terrestrial peat depth, basal peat radiocarbon ages, basin geomorphology, and satellite-derived land surface properties (Normalized Difference Vegetation Index (NDVI); Minimum Noise Fraction (MNF)) from Landsat satellite data revealed significant relationships between peat thickness and mean basin NDVI or MNF. By upscaling observed relationships, we infer that drained thermokarst lake basins, covering 391 km2 (76%) of the 515 km2 study region, store 6.4–6.6 Tg organic C in drained lake basin terrestrial peat. Peat accumulation in drained lake basins likely serves to offset greenhouse gas release from thermokarst-impacted landscapes and should be incorporated in landscape-scale C budgets.