Wetlands are the largest natural source of atmospheric methane, the second most important greenhouse gas. Methane flux to the atmosphere depends strongly on the climate; however, by far the largest part of the methane formed in wetland ecosystems is recycled and does not reach the atmosphere. The biogeochemical controls on the efficient oxidation of methane are still poorly understood. Here we show that submerged Sphagnum mosses, the dominant plants in some of these habitats, consume methane through symbiosis with partly endophytic methanotrophic bacteria, leading to highly effective in situ methane recycling. Molecular probes revealed the presence of the bacteria in the hyaline cells of the plant and on stem leaves. Incubation with (13)C-methane showed rapid in situ oxidation by these bacteria to carbon dioxide, which was subsequently fixed by Sphagnum, as shown by incorporation of (13)C-methane into plant sterols. In this way, methane acts as a significant (10-15%) carbon source for Sphagnum. The symbiosis explains both the efficient recycling of methane and the high organic carbon burial in these wetland ecosystems.