The algal-bacterial mat of a high-sulfate hot spring (Bath Lake) provided an environment in which to compare terminal processes involved in anaerobic decomposition. Sulfate reduction was found to dominate methane production, as indicated by comparison of initial electron flow through the two processes, rapid conversion of [2-C]acetate to CO(2) and not to CH(4), and the lack of rapid reduction of NaHCO(3) to CH(4). Sulfate reduction was the dominant process at all depth intervals, but a marked decrease of sulfate reduction and sulfate-reducing bacteria was observed with depth. Concurrent methanogenesis was indicated by the presence of viable methanogenic bacteria and very low but detectable rates of methane production. A marked increased in methane production was observed after sulfate depletion despite high concentrations of sulfide (>1.25 mM), indicating that methanogenesis was not inhibited by sulfide in the natural environment. Although a sulfate minimum and sulfide maximum occurred in the region of maximal sulfate reduction, the absence of sulfate depletion in interstitial water suggests that methanogenesis is always severely limited in Bath Lake sediments. Low initial methanogenesis was not due to anaerobic methane oxidation.