Establishing firm radiocarbon chronologies for Quaternary permafrost sequences remains a challenge because of the persistence of old carbon in younger deposits. To investigate carbon dynamics and establish ice wedge formation ages in Interior Alaska, we dated a late Pleistocene ice wedge, formerly assigned to Marine Isotope Stage (MIS) 3, and host sediments near Fairbanks, Alaska, with 24 radiocarbon analyses on wood, particulate organic carbon (POC), air-bubble CO2, and dissolved organic carbon (DOC). Our new CO2 and DOC ages are up to 11,170 yr younger than ice wedge POC ages, indicating that POC is detrital in origin. We conclude an ice wedge formation age between 28 and 22 cal ka BP during cold stadial conditions of MIS 2 and solar insolation minimum, possibly associated with Heinrich event 2 or the last glacial maximum. A DOC age for an ice lens in a thaw unconformity above the ice wedge returned a maximum age of 21,470 ± 200 cal yr BP. Our variable 14C data indicate recycling of older carbon in ancient permafrost terrain, resulting in radiocarbon ages significantly older than the period of ice-wedge activity. Release of ancient carbon with climatic warming will therefore affect the global 14C budget.