The ongoing warming in high-latitude regions may be causing rapid changes in the structure and functioning of terrestrial ecosystems. Of particular concern is the fate of belowground soil organic carbon stored in peat-accumulating wetlands, as these large carbon pools are sensitive to temperature and moisture conditions. Despite their important role in the global carbon cycle, considerable uncertainty remains over the carbon balance of northern peatlands in a changing climate. Here we examine the response of vegetation and carbon dynamics in a wet boreal peatland to recent climate warming using empirical peat core data and a new modeling approach. We observed a widespread shift from herbaceous Carex fen peat to Sphagnum moss peat around 100 years ago that was accompanied by a sharp increase in carbon accumulation rate. The observed apparent carbon accumulation rates over the past 100 years (96.8 g C m-2 yr-1) were almost 10 times greater than those over the past 4000 years (11.5 g C m-2 yr-1). Once differential decomposition history was considered using three modeling approaches, the expected long-term accumulation rate of recent peat was still 2–6 times greater than that of the past 4000 years. We propose that recent warming has led to Sphagnum establishment, which rapidly altered the peatland surface chemistry and hydrology, further promoting Sphagnum growth and enhancing the carbon sink capacity of this peatland. Longer and warmer growing seasons could also have stimulated plant growth. Our results imply that accelerated carbon accumulation under global warming in some wet peatlands might offset some of the carbon losses experienced from other peatland types.