We measured a cut-away peatland's CH4 dynamics using the static chamber technique one year before and two years after restoration (rewetting). The CH4 emissions were related to variation in vegetation and abiotic factors using multiple linear regression. A statistical model for CH4 flux with cottongrass cover (Eriophorum vaginatum L.), soil temperature, water level, and effective temperature sum index as driving variables explained most (r2 = 0.81) of the temporal and spatial variability in the fluxes. In addition to the direct increasing effect of raised water level on CH4 emissions, rewetting also promoted an increase of cottongrass cover which consequently increased carbon flux (substrate availability) into the system. The seasonal CH4 dynamics in tussocks followed seasonal CO2 dynamics till mid August but in late autumn CH4 emissions increased while CO2 influxes decreased. The reconstructed seasonal CH4 exchange was clearly higher following the rewetting, although it was still lower than emissions from pristine mires in the same area. However, our simulation for closed cottongrass vegetation showed that CH4 emissions from restored peatlands may remain at a lower level for a longer period of time even after sites have become fully vegetated and colonized by mire plants.