Six cores were collected from a small peatland on the Tuktoyaktuk Peninsula, yielding up to 1.8 m of organic material and 1.2 m of ice-rich material. Stratigraphic relationships, radiocarbon dating, and pollen, plant macrofossil, and isotopic analyses are used to reconstruct the developmental history of the peatland. Organic matter began to accumulate in the basin about 7200 yr B.P., during a period when the climate is thought to have been warmer than present. Initially the permafrost table was probably below the bottom of the basin, and an open-water mineral wetland with emergent and submergent aquatic vegetation occupied the site. Enriched δ18O values from ice samples confirm the existence of an open water body with a water balance strongly affected by evaporation. Transformation to a graminoid fen peatland was underway by 6300 yr B.P. Permafrost and ice began to form in the peatland at this time. Low-centered polygons probably began to develop by 4700 yr B.P. and subsequently evolved into the high-centered polygons which characterise the southwestern part of the peatland today. Peat accumulation in the polygons has been extremely slow for the last 4000 years. The eastern, wetter part of the basin has largely remained unchanged since its inception about 7000 yr B.P. Development of the peatland may be linked to permafrost formation that was controlled by regional climate changes during the Holocene.