The discontinuous permafrost zone is one of the world’s most sensitive areas to climate change. Alaskan boreal forest is underlain by discontinuous permafrost, and wildfires are one of the most influential agents negatively impacting the condition of permafrost in the arctic region. Using interferometric synthetic aperture radar (InSAR) of Advanced Land Observation Satellite (ALOS) Phased Array type L-band Synthetic Aperture Radar (PALSAR) images, we mapped extensive permafrost degradation over interior Alaskan boreal forest in Yukon Flats, induced by the 2009 Big Creek wildfire. Our analyses showed that fire-induced permafrost degradation in the second post-fire thawing season contributed up to 20 cm of ground surface subsidence. We generated post-fire deformation time series and introduced a model that exploited the deformation time series to estimate fire-induced permafrost degradation and changes in active layer thickness. The model showed a wildfire-induced increase of up to 80 cm in active layer thickness in the second post-fire year due to pore-ice permafrost thawing. The model also showed up to 15 cm of permafrost degradation due to excess-ice thawing with little or no increase in active layer thickness. The uncertainties of the estimated change in active layer thickness and the thickness of thawed excess ice permafrost are 27.77 and 1.50 cm, respectively. Our results demonstrate that InSAR-derived deformation measurements along with physics models are capable of quantifying fire-induced permafrost degradation in Alaskan boreal forests underlain by discontinuous permafrost. Our results also have illustrated that fire-induced increase of active layer thickness and excess ice thawing contributed to ground surface subsidence.