Arctic permafrost coasts, affected by rising sea levels and increasing coastal erosion in a warming climate, undergo significant changes. Simulating how permafrost is impacted by inundation with fresh, brackish and marine water enhances our understanding of permafrost carbon stock responses to increasingly marine conditions. We investigated CO2 and CH4 production during key transitions in a coastal thermokarst landscape on the Bykovsky Peninsula, Siberia, assessing short- and long-term microbial responses to varying salinities in anaerobic 1-year incubation experiments. Initially, CO2 production from saltwater-inundated permafrost was low due to the low abundance of salt-tolerant microbial communities. Over the long term, after simulated lagoon formation and the growth of sulfate-reducing bacteria, CO2 production surpassed that of the terrestrial sites by 8 times. CO2 and CH4 production was lowest under fully marine conditions, suggesting incomplete adaptation of microbes. Rapid ecosystem changes stress microbial communities, with greenhouse gas production highest under near-natural conditions. With an increase in lake drainage events and rising sea levels, thermokarst lagoon distribution on Arctic coasts will escalate, resulting in a further increase of carbon mineralization and CO2 release. With this study, we provide first estimations on greenhouse gas production during the transition from terrestrial to submarine conditions in permafrost-affected aquatic systems.