Climate warming has a strong impact on permafrost coasts in the Arctic. With increasing air and water temperatures the ice-rich unlithified permafrost coasts will thaw and erode at a greater pace. Organic carbon that has been stored for thousands of years is mobilized and degrades on its way to the ocean. The objective of this study is to investigate to what extend permafrost carbon degrades after thawing before it enters the ocean and to investigate the concentration patterns of organic carbon within a retrogressive thaw slump. Such a slump system on Herschel Island (Yukon Territory, Canada) was sampled systematically along transects from the permafrost headwall through the thawed material in the slump floor toward the coastline. Concentrations of particulate and dissolved organic carbon (POC and DOC) as well as its stable carbon isotopes (δ13C-POC and δ13C-DOC) have been measured and compared in frozen deposits and in thawed sediments. Moreover, the nutrients ammonium, nitrite and nitrate have been analyzed in order to identify and understand the carbon metabolization mechanisms. Our results show that major portions of permafrost carbon are metabolized right after thawing. Ammonium concentrations are highest in areas where thawed permafrost material directly accumulates. We show that before entering the nearshore zone permafrost organic carbon and nitrogen is subject to major degradation and metabolization. To conclude, permafrost carbon is already highly degraded before entering the nearshore zone of the Arctic Ocean. This makes permafrost coasts and retrogressive thaw slumps to degradation hotspots at the land-ocean-interface.