Abstract In the Arctic Seas, the West Spitsbergen continental margin represents a prominent methane seep area. In this area, free gas formation and gas ebullition as a consequence of hydrate dissociation due to global warming are currently under debate. Recent studies revealed shallow gas accumulation and ebullition of methane into the water column at more than 250 sites in an area of 665 km2. We conducted a detailed study of a subregion of this area, which covers an active gas ebullition area of 175 km2 characterized by 10 gas flares reaching from the seafloor at~245 m up to 50 m water depth to identify the fate of the released gas due to dissolution of methane from gas bubbles and subsequent mixing, transport and microbial oxidation. The oceanographic data indicated a salinity-controlled pycnocline situated ~20 m above the seafloor. A high resolution sampling program at the pycnocline at the active gas ebullition flare area revealed that the methane concentration gradient is strongly controlled by the pycnocline. While high methane concentrations of up to 524 nmol L−1 were measured below the pycnocline, low methane concentrations of less than 20 nmol L−1 were observed in the water column above. Variations in the δ 13 C CH 4 values point to a 13C depleted methane source (~−60‰ VPDB) being mainly mixed with a background values of the ambient water (~−37.5‰ VPDB). A gas bubble dissolution model indicates that ~80% of the methane released from gas bubbles into the ambient water takes place below the pycnocline. This dissolved methane will be laterally transported with the current northwards and most likely microbially oxidized in between 50 and 100 days, since microbial CH4 oxidation rates of 0.78 nmol d−1 were measured. Above the pycnocline, methane concentrations decrease to local background concentration of ~10 nmol L−1. Our results suggest that the methane dissolved from gas bubbles is efficiently trapped below the pycnocline and thus limits the methane concentration in surface water and the air–sea exchange during summer stratification. During winter the lateral stratification breaks down and fractions of the bottom water enriched in methane may be vertically mixed and thus be potentially an additional source for atmospheric methane.