Abstract <p>Thermokarst lakes contribute to greenhouse gas emissions but often experience constraints on available nitrogen. However, the interactions between carbon and nitrogen cycles in these systems, especially along the terrestrial-aquatic continuum, remain poorly understood. The increased soil–water connectivity in those systems affects organic matter processing, nutrient availability, and microbial transport. In Nunavik (Quebec, Canada), we sampled along a transect from a palsa (permafrost remnant) through an emerging thermokarst lake to peatland soils and mature lake. Using hybrid metagenome co-assemblies with gene-, plasmid-, and genome-centric approaches, we explored key biogeochemical cycles and the role of plasmids in microbial adaptation along the transect. Gene annotation, metagenome-assembled genome (MAG) reconstruction, and network analysis revealed a shift from potential for anaerobic ammonium oxidation (anammox) in palsa and emerging lake to potential for nitrification in mature lake. Potential for methanogenesis transitions from hydrogenotrophic in the palsa to methylotrophic in lakes, likely driven by a bacterial consortium degrading aromatic, peat-derived compounds. Sediments may support methane production via both hydrogenotrophic and acetoclastic potential for methanogenesis, partially fueled by the action of polysaccharide lyases. Anaerobic methane oxidation (AOM) potential seems important in both peat and the mature lake; and can be coupled with nitrification and sulfate-reducing partners through extracellular electron transfer, with cytochromes playing a central role. Notably, plasmidome shifts preceded metagenomic changes, especially in genes related to carbon and methane cycling, suggesting a role for plasmids in microbial adaptation to permafrost thaw. These findings highlight the complex microbial and plasmid dynamics that drive carbon, nitrogen, and greenhouse gas cycles in permafrost ecosystems.</p> Graphical abstract <p></p>