On Earth, permafrost thawing is linked to climate warming. Similarly, on Mars, permafrost degradation, described from mid-latitude and equatorial settings, is likely linked to global or regional climate change. Putative thermokarst depressions identified on Mars are widely considered to be the result of sublimation, evaporation, or thawing of an ice-rich substrate. The possibility that the depressions formed by melting of permafrost to create alas-like lakes has been recently proposed, but is controversial, owing to the lack of primary evidence for liquid filling the depressions. Here we use high-resolution Mars Reconnaissance Orbiter Context Camera images and derived topographic data to characterize possible thermokarst terrain in Ares Vallis. The terrain comprises subcircular to irregular, flat-floored rimless topographic depressions that occur at varying elevations. We report the discovery of narrow channels connecting thermokarst-like depressions that provide evidence for the previous presence of ponded liquid water. Crater counts on these surfaces indicate resurfacing that is likely related to flood deposition of water-saturated sediments in Ares Vallis during the Hesperian (ca. 3.6–3.0 Ga). We infer that thermokarst lakes formed after flooding by thawing of ice within the sediments during transient warm periods in the Hesperian, a time previously considered to be too cold to permit ice thaw.