Thaw lakes in permafrost areas are sources of the strong greenhouse gas methane. They develop mostly in sedimentary lowlands with permafrost and a high excess ground ice volume, resulting in large areas covered with lakes and drained thaw-lake basins (DTLBs; refs,). Their expansion is enhanced by climate warming, which boosts methane emission and contributes a positive feedback to future climate change. Modelling of thaw-lake growth is necessary to quantify this feedback. Here, we present a two-dimensional landscape-scale model that includes the entire life cycle of thaw lakes; initiation, expansion, drainage and eventual re-initiation. Application of our model to past and future lake expansion in northern Siberia shows that lake drainage strongly limits lake expansion, even under conditions of continuous permafrost. Our results suggest that methane emissions from thaw lakes in Siberia are an order of magnitude less alarming than previously suggested, although predicted lake expansion will still profoundly affect permafrost ecosystems and infrastructure. © 2011 Macmillan Publishers Limited.