Accumulating evidence suggests that methane has been released episodically from hydrates trapped in sea floor sediments during many intervals of rapid climate warming. Here we show that sediments from the Santa Barbara Basin deposited during warm intervals in the last glacial period contain molecular fossils that are diagnostic of aerobic and anaerobic methanotrophs. Sediment intervals with high abundances of these compounds indicate episodes of vigorous methanotrophic activity in methane-laden water masses. Signals for anaerobic methanotrophy in 44,100-year-old sediment are evidence for particularly intense methane emissions and suggest that the basin's methane cycle can profoundly affect oxygen budgets in the water column.