Forest fires in permafrost areas often modify ground surface conditions, causing deepening of the active layer and thawing of near-surface permafrost. Takhini River valley lies in the discontinuous permafrost zone of southern Yukon Territory. The valley floor is covered by glaciolacustrine deposits, which are locally ice rich. In 1958 extensive forest fires burned most of the vegetation and the soil organic horizon in the valley, but, 50 km west of Whitehorse, 1 km2 of spruce forest adjacent to the Alaska Highway escaped burning. Permafrost beneath this stand of trees is in equilibrium with surface conditions: the active layer is 1.4 m thick, the base of permafrost is at 18.5 m, the annual mean temperature at the top of permafrost (1.5 m) is -0.8°C, and the temperature gradient in permafrost is constant with depth. At burned sites nearby there has been little regeneration of forest vegetation since the fire, and long-term permafrost degradation has occurred. At one burned site, the permafrost table is more than 3.75 m below the ground surface, the mean annual ground temperature is -0.2°C or warmer throughout the profile, the annual mean temperature at 1.5 m is 0.1°C, and permafrost is thawing from top and bottom. A simplified analytical model for thawing of permafrost indicates that over a millennium will be required to degrade permafrost completely at this site, if thawing proceeds from the top down. The result demonstrates the persistence of ice-rich permafrost a few metres below the ground surface, even at sites near the southern margin of permafrost in Canada.