Coastal areas are an important source of methane (CH4). However, the exact origins of CH4 in the surface waters of coastal regions, which in turn drive sea-air emissions, remain uncertain. To gain a comprehensive understanding of the current and future climate change feedbacks, it is crucial to identify these CH4 sources and processes that regulate its formation and oxidation. This study investigated coastal CH4 dynamics by comparing water column data from six stations located in the brackish Tvärminne Archipelago, Baltic Sea. The sediment biogeochemistry and microbiology were further investigated at two stations (i.e., nearshore and offshore). These stations differed in terms of stratification, bottom water redox conditions, and organic matter loading. At the nearshore station, CH4 diffusion from the sediment into the water column was negligible, because nearly all CH4 was oxidized within the upper sediment column before reaching the sediment surface. On the other hand, at the offshore station, there was significant benthic diffusion of CH4, albeit the majority underwent oxidation before reaching the sediment-water interface, due to shoaling of the sulfate methane transition zone (SMTZ). The potential contribution of CH4 production in the water column was evaluated and was found to be negligible. After examining the isotopic signatures of δ13C-CH4 across the sediment and water column, it became apparent that the surface water δ13C-CH4 values observed in areas with thermal stratification could not be explained by diffusion, advective fluxes, nor production in the water column. In fact, these values bore a remarkable resemblance to those detected below the SMTZ. This supports the hypothesis that the source of CH4 in surface waters is more likely to originate from ebullition than diffusion in stratified brackish coastal systems.