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Abstract Peatlands are the most efficient natural ecosystems for long‐term storage of atmospheric carbon. Our understanding of peatland carbon cycling is based entirely on bottom‐up controls regulated by low nutrient availability. Recent studies have shown that top‐down controls through predator‐prey dynamics can influence ecosystem function, yet this has not been evaluated in peatlands to date. Here, we used a combination of nutrient enrichment and trophic‐level manipulation to test the hypothesis that interactions between nutrient availability (bottom‐up) and predation (top‐down) influence peatland carbon fluxes. Elevated nutrients stimulated bacterial biomass and organic matter decomposition. In the absence of top‐down regulation, carbon dioxide (CO₂) respiration driven by greater decomposition was offset by elevated algal productivity. Herbivores accelerated CO₂emissions by removing algal biomass, while predators indirectly reduced CO₂emissions by muting herbivory in a trophic cascade. This study demonstrates that trophic interactions can mitigate CO₂emissions associated with elevated nutrient levels in northern peatlands.