Paclele Mici is a terrestrial mud volcano field located in the Carpathian Mountains (Romania), where thermal alteration of sedimentary organic compounds leads to methane, higher hydrocarbons and other petroleum compounds that are continuously released into the environment. The hydrocarbons represent potential substrates for microorganisms. We studied lipid biomarkers, stable isotope ratios, the effect of substrate (methane, other organic compounds) addition and 16S rRNA genes to gain insights into the hitherto unknown microbial community at this site. Quantitative real-time polymerase chain reaction analysis demonstrated that bacteria were much more abundant than archaea. Phylogenetic analyses of 16S rDNA clone sequences indicated the presence of bacterial and archaeal lineages generally associated with the methane cycle (methanogens, aerobic and anaerobic methanotrophs), the sulfur cycle (sulfate reducers), and groups linked to the anaerobic degradation of alkanes or aromatic hydrocarbons. The presence of sulfate reducers, methanogens and methanotrophs in this habitat was also confirmed by concurrent surveys of lipid biomarkers and their isotopic signatures. Incubation experiments with several common and complex substrates revealed the potential of the indigenous microbial community for sulfate reduction, methanogenesis and aerobic methanotrophy. Additionally, consistently to the detection of methane-oxidizing archaea (ANME) and 13C-depleted archaeal lipids, a weak but significant activity of anaerobic methane oxidation was measured by radiotracer techniques and in vitro. This survey is the first to report the presence and activity of ANME in a terrestrial environment.