Net methane (CH4) flux across the ecosystem-atmosphere boundary is governed by two counteracting processes, CH4 oxidation and production. Recent research on CH4 cycling has focused on net CH4 fluxes, however, the separate processes of CH4 oxidation and production may vary at local scales and respond differently to environmental change. Here, we separate CH4 oxidation and production, measured as emission, in situ using CH4 oxidation inhibition combined with a novel in situ 13CH4 labeling experiment to determine the rate of soil oxidation of atmospheric CH4. The study was conducted in a subarctic heath ecosystem with three characteristic plant community types: moist mixed species heath, dry Carex-dominated heath, and wet Eriophorum-dominated fen. We further explored the projected climate change effects of increased temperature and enhanced leaf litter input. The CH4 oxidation inhibition experiment revealed significant potential CH4 emission despite net CH4 uptake. Total CH4 oxidation and potential CH4 emission rates differed significantly between plant communities, demonstrating high local-scale variation in CH4 fluxes. Climate treatments did not affect CH4 oxidation rates, however, warming tended to increase potential CH4 emission, indicating that climate change may affect oxidation and production rates asymmetrically. Near-surface soil oxidation of atmospheric CH4 was successfully traced using 13C stable isotope labeling in situ. CH4 oxidation rates ranged widely, yet preliminarily suggested some degree of substrate limitation. Accounting for the local-scale variation in CH4 fluxes and the relative importance of the separate processes of CH4 oxidation and production will contribute importantly to predicting changes in landscape-scale CH4 budgets and climate feedbacks.