Palsa peatlands, permafrost-affected peatlands characteristic of the outer margin of the discontinuous permafrost zone, form unique ecosystems in northern-boreal and arctic regions, but are now degrading throughout their distributional range due to climate warming. Permafrost thaw and the degradation of palsa mounds are likely to affect the biogeochemical stability of soil organic matter (that is, SOM resistance to microbial decomposition), which may change the net C source/sink character of palsa peatland ecosystems. In this study, we have assessed both biological and chemical proxies for SOM stability, and we have investigated SOM bulk chemistry with mid-infrared spectroscopy, in surface peat of three distinct peatland features in a palsa peatland in northern Norway. Our results show that the stability of SOM in surface peat as determined by both biological and chemical proxies is consistently higher in the permafrost-associated palsa mounds than in the surrounding internal lawns and bog hummocks. Our results also suggest that differences in SOM bulk chemistry is a main factor explaining the present SOM stability in surface peat of palsa peatlands, with selective preservation of recalcitrant and highly oxidized SOM components in the active layer of palsa mounds during intense aerobic decomposition over time, whereas SOM in the wetter areas of the peatland remains stabilized mainly by anaerobic conditions. The continued degradation of palsa mounds and the expansion of wetter peat areas are likely to modify the bulk SOM chemistry of palsa peatlands, but the effect on the future net C source/sink character of palsa peatlands will largely depend on moisture conditions and oxygen availability in peat.