In the sporadic permafrost zone of the James Bay region in northwestern Quebec (Canada), permafrost has been showing signs of advanced degradation for the past 50 years. Several palsa peatlands are among the few remaining sites with evidence of permafrost presence. We conducted a high-resolution stratigraphic macrofossil analysis of a palsa situated on the shore of Duncan Lake, near the southern limit of sporadic permafrost distribution, to reconstruct the stages of peatland development since its formation, examine the respective roles of allogenic and autogenic factors in this development, and determine the period during which permafrost and palsa formed. Organic matter began to accumulate following the retreat of the postglacial Tyrrell Sea. Three main stages can be identified in the peatland history at the sampling site: lake (>5310 cal years BP), minerotrophic peatland (5310–760 cal years BP), and ombrotrophic peatland (<760 cal years BP). This hydroseral succession reflects primarily an autogenic sequence. Permafrost and palsa formed sometime during the last 300 years, most likely around 1750 A.D. (200 cal years BP) in response to the cold climatic conditions of the Little Ice Age.