Oligotrophic, Sphagnum-dominated peatlands have been regarded as long-term stable ecosystems that function as carbon sinks. As a result of environmental perturbations, particularly anthropogenic N deposition, this view is now increasingly questioned. We examined whether small-scale field experiments can predict the direction and magnitude of ecosystem responses to increased N supply. We, therefore, compared data from a 10-year field experiment (involving deposition of 2, 15 and 30 kg N ha−1 year−1) with data from a gradient associated with increased N deposition (2, 8 and 12 kg N ha−1 year−1). We chose to compare: (1) the physiological response of Sphagnumbalticum, measured in the form of N accumulation as free amino acids (NAA); and (2) changes in the total Sphagnum cover, the cover of S. balticum, and vascular plant cover. In all cases we found a highly significant correlation between the two data sets. We attribute the high correspondence between the two data sets to the key function of the dominant group of organisms, the Sphagna, that monopolize N availability and control the water balance, creating an environment hostile to vascular plants. Thus the key role of Sphagna as ecosystem engineers seems to supersede the role of other, scale-dependent processes. We also conclude that NAA is a sensitive indicator that can be used to signal the slow and gradual shift from Sphagnum to vascular plant dominance.