Permafrost thawing may release nitrous oxide (N₂O) due to large N storage in cold environments. However, N₂O emissions from permafrost regions have received little attention to date, particularly with respect to the underlying microbial mechanisms. We examined the magnitude of N₂O fluxes following upland thermokarst formation along a 20-year thaw sequence within a thermo-erosion gully in a Tibetan swamp meadow. We also determined the importance of environmental factors and the related microbial functional gene abundance. Our results showed that permafrost thawing led to a mass release of N₂O in recently collapsed sites (3 years ago), particularly in exposed soil patches, which presented post-thaw emission rates equivalent to those from agricultural and tropical soils. In addition to abiotic factors, soil microorganisms exerted significant effects on the variability in the N₂O emissions along the thaw sequence and between vegetated and exposed patches. Overall, our results demonstrate that upland thermokarst formation can lead to enhanced N₂O emissions, and that the global warming potential (GWP) of N₂O at the thermokarst sites can reach 60% of the GWP of CH₄ (vs ～6% in control sites), highlighting the potentially strong noncarbon (C) feedback to climate warming in permafrost regions.