This study experimentally tested the impact of peat bog habitat loss and isolation on the invertebrate community associated with Sporadanthus ferrugineus (Restionaceae), a dominant indigenous plant species in peat bogs. Potted S. ferrugineus plants were exposed to invertebrates at various distances up to 800 m from an intact habitat (the source population) over 18 weeks. Invertebrates rapidly colonized the experimental plants, with all major orders and trophic groups present on S. ferrugineus within 6 weeks. However, with increasing distance away from the undisturbed habitat, there was a significant decrease in total species richness and abundance of invertebrates associated with the potted plants. Of the total taxa captured, only 38% were found on potted S. ferrugineus plants at 800 m compared with 62% found on potted plants 30 m from the intact peat bog. Predator species richness and the predator–prey ratio changed significantly with time available for colonization of potted plants but, more importantly, prey (herbivores and detritivores) and predator (including parasitoids) species richness, as well as the predator–prey ratio, declined significantly with increasing isolation from the peat bog. Thus, the degree of isolation of restoration areas from undisturbed habitat has a major impact on the rate and patterns of recovery in invertebrate community structure. The current recommended practice of restoring the mined area by establishing raised “habitat islands” 30 m apart should result in colonization by most invertebrates associated with S. ferrugineus, but only if the restoration islands are placed as stepping stones outward from existing areas of intact habitat.