The distribution of methane and methane-oxidizing bacteria in the water column of Lake Washington was determined monthly for 1 year. The methane profiles were relatively constant, with little stratification and low concentrations (0.05 to 0.5 ,uM). The number of methane-oxidizing bacteria detected by a filter-plating method was routinely <1/ml throughout the water column, and no incorporation or oxidation of methane was detected by radioisotopic labeling, even after methane was added. However, samples taken from the sediment-water interface contained as much as 3 ,uM methane and 50 CFU of methane-oxidizing bacteria per ml and showed significant rates of methane oxidation and incorporation. To define the region of maximum activity more precisely, vertical profiles of the sediment were examined. The concentration of methane increased with depth to a maximum of 150 to 325 p.M at 2.5 cm, and significant rates of methane oxidation were found within the top 2.5 cm. The apparent Kms for methane and oxygen were determined for samples from the top 1.0 cm of the sediment and found to be ca. 10 and 20 pM, respectively. Projected values for methane oxidation rates suggested that maximum methane oxidation occurred in the top 0.5 cm of the sediment.