Methane oxidation in the anoxic sediments of Skan Bay, Alaska resulted in fractionation of carbon and hydrogen isotopes in methane. Isotope fractionation factors were estimated by fitting methane concentration, δ13C‐CH4, and δD‐CH4 data with depth distributions predicted by an open system, steady state model. Assuming that molecular diffusion coefficients for 12CH4, 13CH4, and12CH3D are identical, the predicted fractionation factors were 1.0088±0.0013 and 1.157±0.023 for carbon and hydrogen isotopes, respectively. If aqueous diffusion coefficients for the different isotopic species of methane differ significantly, the predicted fractionation factors are larger by an amount proportional to the diffusion isotope effect.