The development of a retrogressive thaw slump near Mayo, Yukon Territory, has been traced from initiation by bank erosion (∼1949) of the Stewart River to stabilization in 1993–1994. The stabilized headwall of the slump is 450 m from the river, and the slope of the slump floor is 3°. A transect of the slump from the river to the stabilized headwall was drilled in July 1995, to determine the extent and rate of permafrost degradation in the slump floor. Thermistors were placed in access tubes to 12 m depth at five sites, four near the transect and one in undisturbed terrain, to determine the magnitude of thermal disturbance due to slump development. Data loggers at the sites recorded the ground temperature at 1 m depth for two years from August 1995. The annual mean ground temperatures measured by the data loggers varied between 1.2° and 1.8°C in the slump, compared with –2.4°C in undisturbed ground, indicating a disturbance of about 4°C due to slumping. The depth of thaw in the slump floor is consistent with the Stefan solution for thawing of permafrost. Conduction is the dominant mode of heat transfer in the slump, where the soil is fine grained and there is almost no organic horizon. Winter ground temperatures at 1 m depth were nearly 6°C warmer in the slump than in the surrounding forest, even though snow depths were similar, due to the release of latent heat during prolonged frost penetration. These data demonstrate the importance of subsurface conditions on near-surface ground temperatures in winter.