Relatively minor amounts of methane, a potent greenhouse gas, are currently emitted from the oceans to the atmosphere, but such methane emissions have been hypothesized to increase as oceans warm. Here, we investigate the source, distribution, and fate of methane released from the upper continental slope of the U.S. Mid-Atlantic Bight, where hundreds of gas seeps have been discovered between the shelf-break and ~1600 m water depth. Using physical, chemical, and isotopic analyses, we identify two main sources of methane in the water column: seafloor gas seeps and in situ aerobic methanogenesis which primarily occurs at 100 – 200 m depth in the water column. Stable isotopic analyses reveal that water samples collected at all depths were significantly impacted by aerobic methane oxidation, the dominant methane sink in this region, with more than 50% of the methane being oxidized, on average. Due to methane oxidation in the deeper water column, below 200 m depth, surface concentrations of methane are influenced more by methane sources found near the surface (0 – 10 m depth) and in the subsurface (10 - 200 m depth), rather than seafloor emissions at greater depths.