We measured net ecosystem CO2 exchange (NEE), plant biomass and growth, species composition, peat microclimate, and litter decomposition in a fertilization experiment at Mer Bleue Bog, Ottawa, Ontario. The bog is located in the zone with the highest atmospheric nitrogen deposition for Canada, estimated at 0.8–1.2 g N m−2 yr−1 (wet deposition as NH4 and NO3). To establish the effect of nutrient addition on this ecosystem, we fertilized the bog with six treatments involving the application of 1.6–6 g N m−2 yr−1 (as NH4NO3), with and without P and K, in triplicate 3 m × 3 m plots. The initial 5–6 years have shown a loss of first Sphagnum, then Polytrichum mosses, and an increase in vascular plant biomass and leaf area index. Analyses of NEE, measured in situ with climate-controlled chambers, indicate that contrary to expectations, the treatments with the highest levels of nutrient addition showed lower rates of maximum NEE and gross photosynthesis, but little change in ecosystem respiration after 5 years. Although shrub biomass and leaf area increased in the high nutrient plots, loss of moss photosynthesis owing to nutrient toxicity, increased vascular plant shading and greater litter accumulation contributed to the lower levels of CO2 uptake. Our study highlights the importance of long-term experiments as we did not observe lower NEE until the fifth year of the experiment. However, this may be a transient response as the treatment plots continue to change. Higher levels of nutrients may cause changes in plant composition and productivity and decrease the ability of peatlands to sequester CO2 from the atmosphere.